One-GN transformation well on track. Hearing continued strong organic growth while Enterprise executed well in stabilizing markets and SteelSeries outperformed the market. Sequential margin improvements resulted in strong positive free cash
10 11월 2023 - 3:00PM
One-GN transformation well on track. Hearing continued strong
organic growth while Enterprise executed well in stabilizing
markets and SteelSeries outperformed the market. Sequential margin
improvements resulted in strong positive free cash
- - GN Store Nord
- GN delivered continued focused execution across the company
resulting in 1% revenue growth compared to Q2 2023. Group organic
revenue growth was 0%
- Adj. EBITA was DKK 495 million, equal to an adj. EBITA margin
improvement of 1.9 percentage points compared to Q2 2023 (0.6
percentage points lower than Q3 2022), driven by tightly managed
OPEX. This led to strong free cash flow excl. M&A of DKK 279
million and in combination with the disposal of BelAudição, the net
interest-bearing debt decreased from DKK 12,073 million to DKK
11,333 million
- GN announced its transformation into one integrated company to
capture innovation synergies, to better serve customer needs, and
to simplify the operating model. This will entail freeing up
resources to invest in future innovation and ultimately create
shareholder value as a fully integrated innovation powerhouse. The
company has identified DKK ~600 million in cost synergies (across
COGS and OPEX) to be realized by 2026 of which roughly two-thirds
will be achieved in 2024
- Reflecting the narrowed guidance for GN Hearing and GN Audio,
GN Store Nord’s organic revenue growth guidance is narrowed from
“-4% to +2%” to “-2% to 0%”. As a consequence of the identified
cost synergies, the Group will incur a further DKK ~ -300 million
in non-recurring items in 2023 due to redundancies and process
streamlining activities. No non-recurring items for 2024 are
expected to drive these synergies
- - GN Hearing
- GN Hearing delivered continued strong organic revenue growth of
15%, driven by strong performance of ReSound OMNIA resulting in
continued significant market share gains in a stable growing
hearing aid market
- Adj. EBITA margin was 16.4% in the Core business, equal to an
increase of 2.3 percentage points compared to Q2 2023 (increase of
5.6 percentage points compared to Q3 2022), driven by tightly
managed OPEX
- Following a stronger than expected Q3 2023, GN Hearing is
narrowing its organic revenue growth guidance from “9% to 13%” to
“11% to 13%”. The EBITA margin in the core business of “14% to 16%”
is confirmed to allow for further investments to drive growth
including launch activities for ReSound Nexia
- - GN Audio
- GN Audio executed well resulting in 4% revenue growth compared
to Q2 2023. As a consequence of a high comparison base organic
revenue growth was -8%
- The Enterprise market experienced general volume stabilization
during the quarter, leading to Enterprise revenue in line with Q2
2023 resulting in an organic revenue growth of -13%
- Both Consumer and SteelSeries delivered solid double-digit
revenue growth compared to Q2 2023. Strong execution in SteelSeries
led to market share gains and organic revenue growth of 10%, while
Consumer delivered -8% organic revenue growth
- Adj. EBITA margin was 11.9%, equal to an improvement of 2.4
percentage points compared to Q2 2023 (2.7 percentage points lower
than Q3 2022), primarily driven by tightly managed OPEX
- Following a Q3 performance in line with expectations, GN
Audio’s organic revenue guidance is narrowed from “-10% to -4%” to
“-9% to -7%”. GN Audio’s adj. EBITA margin is confirmed at “10% to
12%”
Quotes from executive managementPeter
Karlstromer, CEO of GN Store Nord, comments: “During Q3, GN Hearing
delivered strong organic growth for the fourth consecutive quarter,
our Enterprise business executed well in stabilizing markets, while
our consumer-oriented businesses delivered strong double-digit
revenue growth sequentially. As a whole, we saw continued strong
execution across the company leading to improved margin levels
compared to Q2 2023 and healthy cash flow, which together with the
disposal of BelAudição supports the successful execution of GN’s
capital plan. We are also excited to embark on the transformation
into a one-company setup, which over time will unlock company-wide
synergies due to a simpler, faster, and more powerful operating
model.”
Financial overview Q3 2023
|
GN Hearing |
GN Audio |
DKK million – Q3 2023 |
Core |
Emerging |
GN Hearing |
Enterprise |
Consumer |
SteelSeries |
GN Audio |
Revenue |
1,590 |
63 |
1,653 |
1,838 |
329 |
623 |
2,790 |
Organic growth |
15% |
17% |
15% |
-13% |
-8% |
10% |
-8% |
Adj. EBITA** |
261 |
-42 |
219 |
|
|
|
331 |
Adj. EBITA margin ** |
16.4% |
|
13.2% |
|
|
|
11.9% |
|
|
|
|
|
|
|
|
|
|
|
GN Store Nord* |
GN Hearing |
GN Audio |
DKK million |
Q3 2023 |
Q3 2022 |
Growth |
Q3 2023 |
Q3 2022 |
Growth |
Q3 2023 |
Q3 2022 |
Growth |
Revenue |
4,443 |
4,701 |
-5% |
1,653 |
1,554 |
6% |
2,790 |
3,147 |
-11% |
Organic growth |
0% |
-1% |
|
15% |
0% |
|
-8% |
-2% |
|
Adj. Gross profit** |
2,230 |
2,355 |
-5% |
1,025 |
1,014 |
1% |
1,205 |
1,341 |
-10% |
Adj. Gross profit margin** |
50.2% |
50.1% |
0.1%p |
62.0% |
65.3% |
-3.3%p |
43.2% |
42.6% |
0.6%p |
Adj. EBITA** |
495 |
548 |
-10% |
219 |
119 |
84% |
331 |
461 |
-28% |
Adj. EBITA margin** |
11.1% |
11.7% |
-0.6%p |
13.2% |
7.7% |
5.5%p |
11.9% |
14.6% |
-2.7%p |
Non-recurring items |
-65 |
-59 |
|
-29 |
-38 |
|
-36 |
-21 |
|
Adj. Earnings per share (EPS)*** |
2.33 |
2.68 |
-13% |
|
|
|
|
|
|
Free cash flow excl. M&A |
279 |
-217 |
496 |
115 |
60 |
55 |
215 |
21 |
194 |
* Including "Other", ** Excluding non-recurring items (DKK -36
million in OPEX in GN Audio, DKK -6 million in COGS in GN Hearing
and DKK -23 million in OPEX in GN Hearing), *** Excluding
non-recurring items (DKK -65 million OPEX and COGS) and
amortization of acquired intangible assets
Financial guidance 2023
|
Organic revenue growth |
Adjusted EBITA margin2) |
Non-recurring items (DKK million)3) |
|
New |
Old |
New |
Old |
New |
Old |
GN Hearing |
11% to 13% |
9% to 13% |
|
|
|
|
- Core business |
|
|
14% to 16% |
14% to 16% |
~ -150 |
~ -150 |
- Emerging Business1) (DKK million) |
|
|
~ -150 |
~ -150 |
|
|
GN Audio |
-9% to -7% |
-10% to -4% |
10% to 12% |
10% to 12% |
~ -150 |
~ -150 |
Other (DKK million) |
|
|
~ -200 |
~ -200 |
~ -300 |
|
GN Store Nord |
-2% to 0% |
-4% to +2% |
|
|
~ -600 |
~ -300 |
Note 1) Emerging Business mainly includes the JabraEnhance.com
(formerly Lively)Note 2) Excluding non-recurring items Note 3) GN
is expecting to incur additional non-recurring items of DKK ~ -300
million in Q4 2023 related to the transformation of One-GN due to
redundancies and process streamlining activities. These
non-recurring items will most likely be incurred across legal
entities. No non-recurring items for 2024 are expected to drive
these synergies
Based on foreign exchange rates as of November 10, 2023
Primary risk factors in relation to the financial guidance
The basic assumptions behind the guidance remain more uncertain
than normal. Primary risk factors include inflationary pressures,
consumer sentiment and general economic uncertainty. GN’s supply
chains, including component sourcing and local and geopolitical
instability and deteriorating trade relations may impact key
suppliers and GN’s operations.
TeleconferenceGN Store Nord will host a
teleconference at 11.00 a.m. CET on November 10, 2023. 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:
Investor RelationsAnne Sofie Staunsbæk Veyhe
+45 45 75 85 06Rune Sandager +45 45 75 92 57Media
RelationsSteen Frentz Laursen +45 20 65 34 20
Forward-looking statementsThe 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 outlook set forth. Furthermore, some of these expectations are
based on assumptions regarding future events, which may prove
incorrect. Changes to such expectation and assumptions will not be
disclosed on an ongoing basis, unless required pursuant to general
disclosure obligations to which GN is subject.
Factors that may cause actual results to deviate materially from
expectations include – but are not limited to – general economic
developments and developments in the financial markets,
technological developments, changes and amendments to legislation
and regulations governing GN’s markets, changes in the demand for
GN's products, competition, fluctuations in sub-contractor supplies
and developments in ongoing litigation (including but not limited
to class action and patent infringement litigation in the United
States).
The securities offered will not be and have not been registered
under the U.S. Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an
applicable exemption from registration requirements
For more information, see the "Management's report" and "Risk
management” elsewhere in the 2022 Annual Report. This Report should
not be considered an offer to sell securities in GN.
About GN
GN brings people closer through our leading intelligent hearing,
audio, video, and gaming solutions. Inspired by people and driven
by innovation, we deliver technology that enhance the senses of
hearing and sight. We help people with hearing loss overcome
real-life challenges, improve communication and collaboration for
businesses, and provide great experiences for audio and gaming
enthusiasts.
GN was founded more than 150 years ago with a vision to connect
the world. Today, inspired by our strong heritage, GN touches more
lives than ever with our unique expertise and the broadest
portfolio of products and services in our history – bringing people
closer to what is important to them.
We market our solutions with the brands Jabra, ReSound,
SteelSeries, Beltone, Interton, BlueParrott, Danavox, and FalCom in
100 countries. Founded in 1869, GN Group employs more than 7,500
people and is listed on Nasdaq Copenhagen (GN.CO).
Visit our homepage GN.com and connect with us on
LinkedIn, Facebook, and Twitter.
- GN Interim report Q3 2023 cover note
- Interim Report Q3 2023
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