4
GN Hearing’s EBITA improved significantly to DKK 153
million in Q2 2021 compared to DKK -336 million in Q2 2020.
As a result, the EBITA margin was 11.6% in Q2 2021. In H1
2021, EBITA increased to DKK 251 million equal to an EBITA
margin of 9.8%.
The return on invested capital (ROIC) was 9% in Q2 2021,
compared to 6% in Q2 2020, due to the strong revenue
growth. ROIC is still below historical levels due to the impact
from COVID-19 as ROIC is calculated based on a 12-months
rolling EBITA.
Free cash flow excl. M&A was DKK 123 million in Q2 2021
compared to DKK -117 million in Q2 2020, mainly driven by
the recovery in revenue and earnings. In H1 2021, free cash
flow excl. M&A was DKK -81 million compared to DKK -183
million in H1 2020.
Business highlights
ReSound ONE
During Q2 2021, GN Hearing continued to execute on the
global roll-out of the revolutionary new class of hearings aids,
ReSound ONE. GN Hearing experiences a continued strong
uptake in the independent market, while the uptake in VA
channel has been impacted by challenging conditions
following the ongoing pandemic. As of July 2021, physical
visits were temporarily allowed in VA after more than a year
of tight restrictions. However, mid-August 2021 the
restrictions were again reinforced, which means that the sales
reps are not expected to be allowed to visit the VA clinics for
the remainder of the year.
Merging the power of GN Audio and GN Hearing
The development of the Jabra Enhance line-up is the
culmination of years of GN Group research into consumer
behavior, hearing challenges and preferences. In launching the
Jabra Enhance line-up, GN Audio’s brand Jabra couples its
expertise in consumer electronics and its brand recognition
with the hearing aid heritage and competencies of GN Hearing
to bring new solutions to users.
Jabra Enhance Pro
In June 2021, GN launched Jabra Enhance Pro, a new
premium hearing aid line-up, in more than 700 Costco Hearing
Aid Centers around the world. With Jabra Enhance Pro,
consumers can now choose high-quality, FDA-approved
hearing solutions from a widely known audio brand trusted by
consumers. Users benefit from GN's latest hearing innovation,
the unique Microphone and Receiver in Ear (M&RIE), to hear
the world around them in the most intuitive and natural way.
Initial feedback and sales from the first weeks are very
encouraging and bodes well for GN Hearing’s competitive
position.
Jabra Enhance Plus
Building on years of research, innovation and engineering in
sound and hearing, GN extends its Jabra Enhance line of
hearing enhancement solutions with Jabra Enhance Plus. In a
first-of-its-kind innovation, GN brings together the
convenience of true wireless earbuds with advanced hearing
technology to alleviate unaddressed user needs and enable
millions to take a first step on their hearing health journey.
This innovation combines a discreet, comfortable design and
Jabra’s legacy of industry-leading earbud capability with GN
Hearing‘s expertise and advanced hearing-enhancing
technology. The Jabra Enhance Plus will provide users with a
medical device, which, once approved, is expected to be
available through licensed Hearing Care Professionals. The
Jabra Enhance Plus brings great true wireless call and music
quality in a miniaturized true wireless form factor, 50%
smaller than Jabra Elite 75t.
Market development
The global hearing aid market in H1 2021 was heavily
impacted by COVID-19 and the consequential volatile regional
and local restrictions. As hearing care professionals and end-
users in our main markets had access to the vaccine
throughout H1 2021, the expectation earlier in the year was
that the market would reset and normalize in H2 2021. Due to
the Delta variant and consequential reinforced local
restrictions the normalization has not yet materialized in all
markets.
We continue to believe that the fundamentals of the hearing
aid market are intact and in the mid-term, GN Hearing still
estimates the annual market growth to be around 4 - 6% in
volumes with annual ASP decline of around 1 - 2%. GN
Hearing’s mid-term target of growing faster than the market
is fully intact.
12.8%
-47.0%
Q2 2020 Q3 2020
11.1%
Q4 2020
7.9%
Q1 2021
-336
Q2 2021
11.6%
EBITA margin
EBITA (DKKm)
-208%
28%
Q3 2020Q2 2020
172%
Q4 2020
80%
Q1 2021
Q2 2021
Cash conversion Free cash flow excl. M&A