In This Article:
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Organic Revenue Growth: 5% at the group level.
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EBITDA Margin: Reported at 8.3%; underlying EBITA margin at 11.8%.
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Free Cash Flow: DKK155 million.
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Gross Margin: 51.9%.
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Adjusted Leverage: 3.9 times.
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Hearing Division Organic Growth: 10%.
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Hearing Division Profit Margin: 33.4%, an improvement of 5 percentage points.
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Enterprise Division Organic Revenue Growth: Negative 3%.
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Enterprise Division Profit Margin: 35%.
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Gaming and Consumer Division Organic Growth: 12%.
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Gaming and Consumer Division Profit Margin: 9%, excluding wind-down costs.
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One-GN Transformation Synergies: DKK100 million realized in the quarter.
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Consumer Product Line Wind-Down Costs: DKK155 million incurred.
Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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GN Store Nord AS (GGNDF) reported strong double-digit organic revenue growth in its hearing division, with improved profit margins.
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The company successfully launched new products and software updates, enhancing its offerings in both the hearing and enterprise segments.
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GN Store Nord AS (GGNDF) achieved a 5% organic growth at the group level, with an underlying EBITA margin improvement of 2 percentage points compared to last year.
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The gaming and consumer division saw a 12% organic growth, driven by strong market reception of new products like the Arctis Nova 5 headset.
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The company is on track with its One-GN transformation, realizing significant cost synergies and reducing adjusted leverage to below 4 times for the first time since 2021.
Negative Points
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The enterprise division experienced a negative 3% organic revenue growth, with market stabilization taking longer than expected.
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GN Store Nord AS (GGNDF) incurred extraordinary costs related to the wind down of its Elite and Talk product lines, impacting financial results.
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The company faces challenges in the enterprise segment, with a delayed recovery now expected towards the end of 2024.
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There is a potential risk of not reaching the high end of the EBITDA margin guidance due to tougher comparisons in the hearing division and delayed enterprise recovery.
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The consumer segment is expected to face a negative revenue impact of around DKK450 million compared to 2023, due to the wind down of certain product lines.
Q & A Highlights
Q: Are you experiencing any challenges in the VA channel due to staff shortages or budget constraints, as mentioned by competitors? A: Peter Karlstromer, CEO: We have not encountered these challenges. Nexia is well-received in the VA, and we see healthy momentum. We are committed to long-term success and market share growth in this channel.