Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- GN Store Nord AS (GGNDF, Financial) reported strong double-digit organic revenue growth in its hearing division, with improved profit margins.
- The company successfully launched new products and software updates, enhancing its offerings in both the hearing and enterprise segments.
- 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.
- The gaming and consumer division saw a 12% organic growth, driven by strong market reception of new products like the Arctis Nova 5 headset.
- 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
- The enterprise division experienced a negative 3% organic revenue growth, with market stabilization taking longer than expected.
- GN Store Nord AS (GGNDF) incurred extraordinary costs related to the wind down of its Elite and Talk product lines, impacting financial results.
- The company faces challenges in the enterprise segment, with a delayed recovery now expected towards the end of 2024.
- 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.
- 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.
Q: What is driving the slower recovery in the enterprise market compared to gaming?
A: Peter Karlstromer, CEO: The enterprise market recovery is slightly delayed but showing positive signs. The gaming market is experiencing slight growth, and we are gaining market share. The dynamics differ as gaming involves consumer purchases, while enterprise involves companies.
Q: Does the delay in enterprise recovery affect your long-term growth targets?
A: Peter Karlstromer, CEO: The delay is minor and does not impact our long-term growth targets. We still believe in a structural growth rate of 3% to 5% for headsets and are optimistic about continued market recovery.
Q: How do you view the competitive environment in the hearing market, particularly regarding pricing?
A: Peter Karlstromer, CEO: We have not observed dramatic changes in pricing behavior. We maintain pricing discipline and believe in the strength of our Nexia offering, which supports our growth assumptions for the second half of the year.
Q: Can you provide an update on your divestment plans and net working capital expectations?
A: Soeren Jelert, CFO: We continue to evaluate assets for divestment if they can find a better home. We expect a positive impact on net working capital in the second half, driven by inventory depletion and improved payables.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
