Interim Report Q1 2022
GN Store Nord delivered
-6% revenue growth and -21%
organic revenue growth in Q1 2022
, constrained by the
global supply chain situation
and on an exceptionally high
comparison base
. Full year guidance confirmed
GN Store Nord
-21%
organic growth
• In Q1 2022, GN delivered -6% revenue growth, of which -21% was organic revenue growth, leading
to a revenue of DKK 3,859 million, constrained by the challenging global supply chain situation and
on an exceptionally high comparison base
•
Adj. EBITA was DKK 264 million and free cash flow excl. M&A was DKK -557 million driven by the
decrease in reported earnings
•
Adj. Leverage ended at 5.4x, reflecting the closing of the SteelSeries transaction and the traditional
seasonality in cash flow generation
• Full year guidance confirmed
GN Hearing
2%
organic growth
• GN Hearing delivered revenue growth of 8% in Q1 2022, of which organic revenue growth was 2%
in a recovering hearing aid market
•
Adj. EBITA margin was 2.0% in the Core business driven by higher freight and input costs,
investments in growth opportunities and traditional seasonality. EBITA for the Emerging business
was DKK -67 million driven by continued investments in future growth
•
Free cash flow excl. M&A was DKK -175 million driven by the lower earnings level and traditional
seasonality, but positively impacted by working capital movements
•
New product launches going as planned and R&D roadmap on track to fuel growth during second
half of 2022
•
Full year guidance confirmed
GN Audio
-30%
organic growth
• GN Audio delivered revenue growth of -12%, of which organic revenue growth was -30% while
SteelSeries delivered organic revenue growth of -35%, constrained by the challenging
global supply
chain situation and on an exceptionally high comparison base
•
GN Audio continued to experience strong underlying demand resulting in a historically high order
backlog
•
The COVID-19 situation in China and Hong Kong challenged the manufacturing and logistics
capacity towards the end of the quarter, which resulted in some short-term delays in shipments
•
Adj. EBITA margin was 14.4%, reflecting the topline development, higher freight and input costs,
the development in FX as well as the consolidation of SteelSeries
•
Free cash flow excl. M&A was DKK -140 million reflecting the decrease in reported earnings
• Full year guidance confirmed
Financial overview Q
1 2022
GN Hearing GN Audio
DKK million – Q1 2022
Core
business
Emerging
business
GN
Hearing
GN Audio
organic
SteelSeries
GN Audio
Revenue
1,297
40
1,337
2,072
450
2,522
Organic growth
2%
76%
2%
-30%
-35%
-30%
Adj. EBITA**
26
-67
-41
364
Adj. EBITA margin **
2.0%
-3.1%
14.4%
GN Store Nord*
GN Hearing
GN Audio
DKK million
Q1 2022
Q1 2021
Growth
Q1 2022
Q1 2021
Growth
Q1 2022
Q1 2021
Growth
Revenue
3,859
4,110
-6%
1,337
1,234
8%
2,522
2,876
-12%
Organic growth
-21%
46%
2%
1%
-30%
82%
M&A growth
12%
0%
1%
-1%
16%
0%
Adj. Gross profit**
1,952
2,249
-13%
804
769
5%
1,148
1,480
-22%
Adj. Gross profit margin**
50.6%
54.7%
-4.1%p
60.1%
62.3%
-2.2%p
45.5%
51.5%
-6.0%p
Adj. EBITA**
264
753
-65%
-41
98
NA
364
714
-49%
Adj. EBITA margin**
6.8%
18.3%
-11.5%p
-3.1%
7.9%
-11.0%p
14.4%
24.8%
-10.4%p
Non-recurring items
-266
0
-29
0
-219
0
Adj. Earnings per share (EPS)***
0.77
3.91
-80%
Free cash flow excl. M&A
-557
-22
-535
-175
-204
+29
-140
438
-578
* Including "Other", ** Excluding non-recurring items (DKK -142 million in COGS in GN Audio, DKK -77 million in OPEX in GN Audio, DKK -3 million in COGS in GN Hearing and
DKK -26 million in OPEX in GN Hearing), *** Excluding non-recurring items (DKK -266 million) and amortization of acquires intangible assets
2
Q1
Q1
Full year
2022
2021
2021
DKK million
(unaud.)
(unaud.)
(aud.)
GN Hearing
Revenue
1,337
1,234
5,332
Revenue growth
8%
-6%
13%
Organic growth
2%
1%
16%
Gross profit margin
59.9%
62.3%
63.8%
EBITA*
-70
98
643
EBITA margin*
-5.2%
7.9%
12.1%
ROIC (EBITA*/Average invested capital)
7%
1%
9%
Free cash flow excl. M&A
-175
-204
198
Cash conversion (Free cash flow excl. M&A/EBITA*)
NA
-208%
31%
GN Audio
Revenue
2,522
2,876
10,443
Revenue growth
-12%
74%
20%
Organic growth
-30%
82%
22%
Gross profit margin
39.9%
51.5%
50.6%
EBITA*
145
714
2,164
EBITA margin*
5.7%
24.8%
20.7%
ROIC (EBITA*/Average invested capital)
22%
86%
79%
Free cash flow excl. M&A
-140
438
1,288
Cash conversion (Free cash flow excl. M&A/EBITA*)
NA
61%
60%
GN Store Nord
Revenue
3,859
4,110
15,775
Revenue growth
-6%
39%
17%
Organic growth
-21%
46%
20%
Gross profit margin
46.8%
54.7%
55.0%
EBITA*
16
753
2,619
EBITA margin*
0.4%
18.3%
16.6%
Profit (loss) before tax
-227
612
2,271
Effective tax rate
21.6%
21.2%
21.2%
ROIC (EBITA*/Average invested capital)
12%
23%
25%
Earnings per share, basic (EPS)
-1.50
3.66
13.63
Earnings per share, fully diluted (EPS diluted)
-1.49
3.61
13.49
Free cash flow excl. M&A
-557
-22
702
Cash conversion (Free cash flow excl. M&A/EBITA*)
NA
-3%
27%
Equity ratio
21.9%
34.1%
26.4%
Net interest-bearing debt
14,227
4,334
5,358
Net interest-bearing debt (period-end)/EBITDA
6.1
1.6
1.8
Share buybacks**
-
-
1,166
Outstanding shares, end of period (thousand)
127,750
129,877
127,718
Average number of outstanding shares (thousand)
127,723
129,426
128,816
Average number of outstanding shares, fully diluted (thousand)
128,357
131,211
130,194
Treasury shares, end of period (thousand)
10,426
12,391
10,458
Share price at the end of the period
332.7
499.4
411.3
Market capitalization
42,502
64,861
52,530
ROIC and NIBD/EBITDA are calculated based on EBITA and EBITDA for the latest four quarters
* Excluding gain (loss) on divestments of operations etc. and amortization of acquired
intangible assets but including amortization of development projects and software
developed in-house.
** Incl. buybacks as part of share based incentive programs
Financial highlights
3
Highlights Q1 2022
• GN Hearing delivered revenue growth of 8% in Q1 2022,
of which organic revenue growth was 2% in a recovering
hearing aid market
• Adj. EBITA margin was 2.0% in the Core business driven by
higher freight and input costs, investments in growth
opportunities and traditional seasonality. EBITA for the
Emerging business was DKK -67 million driven by
continued investments in future growth
• Free cash flow excl. M&A was DKK -175 million driven by
the lower earnings level and traditional seasonality, but
positively impacted by working capital movements
• New product launches going as planned and R&D roadmap
on track to fuel growth during second half of 2022
• Full year guidance confirmed
Revenue
GN Hearing delivered organic revenue growth of 2% in Q1
2022. Revenue growth was 8% including around 5%
impact from the development in foreign exchange rates
and around 1% impact from M&A, reflecting the
acquisition of Lively and divestments of Beltone retail
stores. The Emerging business delivered 76% organic
revenue growth. GN Hearing started shipment of Jabra
Enhance Plus and ReSound ONE BTEs receiving
encouraging initial feedback.
The hearing aid markets are recovering, but still with
differences across regions and countries due to the impact
from the Omicron variant of COVID-19 especially in
several countries in Asia.
GN Hearing revenue development
North America
In North America, the hearing aid market continued to
perform well despite a temporary setback in January
following the spread of the Omicron variant of COVID-19.
GN Hearing’s organic revenue growth in North America
was 1% driven by solid performance in the independent
market but offset by the performance in the VA and the
negative ASP development in Costco. Starting this
quarter, GN Hearing has again been able to visit, consult
and train the VA clinics, following more than 1½ years of
visit restrictions in the VA due to COVID-19.
In North America overall, revenue growth was 12%
including around 8% impact from the development in
foreign exchange rates and 3% impact from M&A.
Europe
In Europe, the hearing aid market has largely recovered,
but with some differences across countries and channels.
GN Hearing performed strongly in, among other,
Germany. Organic revenue growth was 2% despite GN’s
decision to suspend all sales to Russia. Revenue growth
was 4% including around 2% impact from the
development in foreign exchange rates.
Rest of World
The Rest of World region continued to be differently
impacted by COVID-19 across countries, depending on the
level of local restrictions with especially China reinforcing
lockdowns towards the end of Q1 2022. Despite the
COVID-19 situation in China and Japan, the organic
revenue growth in Rest of World region was 3%. Revenue
growth was 6% including around 3% impact from the
development in foreign exchange rates.
Earnings and other financial highlights
Adj. gross profit reached DKK 804 million in Q1 2022
corresponding to a gross margin of 60.1% compared to
62.3% in Q1 2021. The gross margin is negatively
impacted by elevated freight costs, increased input costs,
the development in VA and Costco as well as mix effects.
In order to mitigate the impact from increasing input
costs, pricing initiatives have been put in place during the
quarter, but with limited impact in Q1 2022.
GN Hearing continued to take prudent OPEX measures to
manage costs. Due to continued investments in growth and
the consolidation of the Lively acquisition adjusted OPEX
increased 26% compared to Q1 2021. Adj. selling and
distribution costs increased by 38% reflecting Lively and
investments into marketing and launch costs. Adj. general
and administrative expenses increased by 7% in Q1 2022
compared to Q1 2021, mainly driven by investments in IT
GN Hearing
8% revenue growth and 2% organic revenue growth in the Core business in Q1
2022
. Two important product launches in the quarter
1,234
1,322
1,347
1,429
1,297
1%
Q1 2021
95%
1,337
Q2 2021 Q4 2021
2%
4%
Q3 2021
2%
40
Q1 2022
Organic growth
Revenue Core business (DKKm)
Revenue Emerging business (DKKm)
4
infrastructure. Investments into R&D was on par with Q1
2021.
GN Hearing’s adj. EBITA was DKK -41 million, with the Core
business delivering adj. EBITA of DKK 26 million and the
Emerging business delivering DKK -67 million. Reported
EBITA amounted to DKK -70 million reflecting non-recurring
items of DKK -29 million being recognized in Q1 2022.
GN Hearing adj. EBITA development
*Excluding non-recurring items
The return on invested capital (ROIC) was 7% in Q1 2022,
compared to 1% in Q1 2021, mainly due to the business
recovery from COVID-19 as ROIC is calculated based on a
12-months rolling EBITA.
Free cash flow excl. M&A was DKK -175 million in Q1 2022
compared to DKK -204 million in Q1 2021, mainly driven by
lower reported EBITA, but partly offset by a positive
development in working capital.
Business highlights
Launch of Jabra Enhance Plus
On February 25, 2022, Jabra Enhance Plus, the FDA cleared
all-in-one earbud with advanced hearing technology to help
more people with mild to moderate hearing loss, started
shipping and is now available exclusively at licensed hearing
care professional throughout the U.S. and in Japan. Jabra
Enhance Plus has been launched under the self-fitting
regulation with around 2,000 clinics already being Certified
Jabra Enhance Centers in the U.S.
Launch of ReSound ONE BTEs
On February 7, 2022, GN Hearing announced the new
ReSound ONE Behind-the-Ear hearing aids, and thus
expanded the premium sound offering from ReSound ONE.
All solutions under the ReSound ONE family were from
February 2022 able to offer hand-free calls for iPhone and
iPad. Initial feedback from the launches has been
encouraging.
As previously communicated, GN Hearing expects to launch a
new rechargeable ITE product late Q2 2022, and a new
platform launch is expected in Q3 2022, building on the
groundbreaking technology of ReSound ONE.
Restoring profitability and non-recurring items
As communicated, GN Hearing expects the Core business to
restore profitability to an EBITA margin of more than 20% by
2024, driven by above-market revenue growth and several
operational initiatives, primarily related to the supply chain.
To accelerate the initiatives and restore profitability, GN
Hearing will incur DKK ~ -150 million in non-recurring items in
2022. For Q1 2022, non-recurring items amounted to DKK
-29 million.
GN Hearing non-recurring items
Market development
The hearing aid market is recovering and is expected to return
to historical growth levels in 2022, however with continued
differences across regions, countries and channels. We
continue to believe that the fundamentals of the hearing aid
market are intact and, in 2022, GN Hearing estimates the
annual market growth to be around 4 - 6% in volumes with an
ASP decline of around 1 - 2%.
Management quote
“We are now looking at a recovering hearing aid market and
see strong and attractive megatrends where GN Hearing’s
competencies will demonstrate our unique ability to innovate.
With the Q1 2022 launch of Jabra Enhance Plus we took an
important first step in reaching new target groups for
occasional hearing enhancement. And with the launch of
ReSound ONE BTE we further broadened our portfolio in the
traditional hearing market, where we have a strong product
roadmap in place for the remainder of the year. Combined
with a solid plan to restore profitability and several emerging
opportunities, I am excited about the coming quarters and
years for our company.”
Gitte Aabo, CEO of GN Hearing
(DKK million) Q1 2022 YTD 2022
Revenue - -
Production costs -3 -3
Gross profit -3 -3
Development costs -3 -3
Selling and distribution costs -18 -18
Management and administrative expenses -5 -5
Other operating income and costs, net - -
EBITA -29 -29
98
153
173
219
26
-67
Q3 2021
2.0%
12.8%
Q1 2021
7.9%
Q2 2021
11.6%
Q4 2021
15.3%
Q1 2022
-41
Adj. EBITA margin Core business*
Adj. EBITA Core business (DKKm)*
Adj. EBITA Emerging business (DKKm)*
5
Highlights Q1 2022
• GN Audio delivered revenue growth of -12%, of which
organic revenue growth was -30% while SteelSeries
delivered organic revenue growth of -35%, constrained by
the challenging global supply chain situation and on an
exceptionally high comparison base
• GN Audio continued to experience strong underlying
demand resulting in a historically high order backlog
• The COVID-19 situation in China and Hong Kong
challenged the manufacturing and logistics capacity
towards the end of the quarter, which resulted in some
short-term delays in shipments
• Adj. EBITA margin was 14.4%, reflecting the topline
development, higher freight and input costs, the
development in FX as well as the consolidation of
SteelSeries
• Free cash flow excl. M&A was DKK -140 million reflecting
the decrease in reported earnings
• Full year guidance confirmed
Revenue
GN Audio delivered -30% organic revenue growth in Q1 2022
driven by a challenging global supply chain situation and an
exceptionally high comparison base of 82% organic revenue
growth in Q1 2021. SteelSeries delivered an organic revenue
growth of -35% in Q1 2022. The COVID-19 situation in China
and Hong Kong challenged the manufacturing and logistics
capacity during the end of the quarter, which resulted in some
short-term delays in shipments equal to approximately one
weeks’ worth of revenue moving from Q1 to Q2 2022.
GN Audio revenue development
Revenue growth was -12% including a 16% impact from M&A,
reflecting SteelSeries. The impact from the development in
foreign exchange rates was around 2%.
North America
In North America, GN Audio delivered -26% organic
revenue growth for the region compared to +59% in Q1
2021. Revenue growth was 8% including around 28%
impact from the M&A and around 6% impact from
development in foreign exchange rates.
Europe
In Europe, GN Audio delivered an organic revenue growth
of -36% on a very high comparison base of +113% in Q1
2021. Revenue growth was -28% including around 8%
impact from M&A and around 1% impact from the
development in foreign exchange rates.
Rest of World
In the Rest of World region, GN Audio delivered -14%
organic revenue growth compared to +40% organic
revenue growth in Q1 2021. Revenue growth was 14%
including around 23% impact from M&A and around 5%
impact from the development in foreign exchange rates.
Earnings and other financial highlights
GN Audio delivered an adjusted gross margin of 45.5% in
Q1 2022 compared to 51.5% in Q1 2021, driven by a
significant negative impact from the elevated level of
freight, increased input costs, development from foreign
exchange rates as well as the consolidation of SteelSeries.
Reported gross margin was 39.9%, reflecting non-
recurring items of DKK -142 million in non-cash PPAs
related to the SteelSeries acquisition. In order to mitigate
the impact from increasing input costs, GN Audio has
initiated price increases across the Enterprise portfolio
from February 1, 2022, but with limited impact in Q1
2022.
GN Audio’s adj. OPEX was DKK 784 million in Q1 2022,
reflecting a 2% increase compared to Q1 2021 primarily
driven by the consolidation of SteelSeries. Selling and
distribution costs increased by 2%, mainly driven by the
consolidation of SteelSeries and cost control to mitigate
the revenue decline, while adj. general & administrative
costs increased 39% due to a low comparison from last
year. Investments into R&D decreased with 5% compared
to Q1 2021, mainly due to a higher capitalization ratio
driven by phasing of projects.
G
N Audio’s adj. EBITA ended at DKK 364 million in Q1
2022, translating into an adjusted EBITA margin of 14.4%,
compared to 24.8% in Q1 2021. The development reflects
the revenue decline, the gross margin development as
well as the consolidation of SteelSeries. Reported EBITA
was DKK 145 million, reflecting DKK -219 million in non-
recurring items related to the acquisition of SteelSeries.
GN Audio
-12% revenue growth and -30% organic revenue growth in GN Audio in Q1 2022,
constrained by the global supply chain situation and on an exceptional
ly high
comparison base
. Continued strong underlying demand
2,876
2,456
2,440
2,671
450
2,072
Q4 2021
32%
Q2 2021 Q3 2021
82%
Q1 2021
1%
-4%
-30%
Q1 2022
2,522
Revenue SteelSeries (DKKm)
Organic growth
Revenue GN Audio Organic (DKKm)
6
GN Audio adj. EBITA development
*Excluding non-recurring items
The return on invested capital (ROIC) was 22% in Q1 2022
compared to 86% in Q1 2021, driven by the lower EBITA
and the increase in invested capital due to the goodwill
recognition from the SteelSeries acquisition. Free cash
flow excl. M&A was DKK -140 million in Q1 2022
compared to DKK 438 million in Q1 2021. The decrease in
cash flow was mainly driven by the lower reported EBITA
and inventory build of certain critical components.
Business highlights
SteelSeries integration and non-recurring items
Following the closing of the SteelSeries transaction on
January 12, 2022, which has provided GN Audio access to the
highly attractive market for high-end gaming gear, the
integration process has been initiated and is well on track. GN
Audio continues to expect annual run-rate of operational
synergies of around DKK 150 million by the end of 2022 and
around half is expected to be realized in 2022. In addition,
future revenue synergies are expected. During Q1 2022, GN
booked non-recurring items related to the SteelSeries
acquisition of DKK -237 million, of which DKK -142 million
was booked as COGS (non-cash PPAs), DKK -77 million was
recognized as general and administrative expenses and
DKK -18 million was booked in financial items. In 2022, GN
Audio continues to expect total transaction and integration
costs of around DKK -200 million, and non-cash PPAs of
around DKK -200 million.
GN Audio non-recurring items
Current supply situation
As previously communicated, certain components have been
in global shortage impacting many industries. In Q1 2022, the
global supply situation continued to be very volatile and
challenging. Latest communication from the suppliers is
pointing in the direction of a significant gradual step up in
component deliveries in the coming quarters. To mitigate the
component shortage a number of initiatives continue to be
executed, including re-engineering of certain high-volume
products, which is expected to benefit GN Audio from end of
Q2 2022.
In addition to the component shortage situation, the COVID-
19 situation and related restrictions in China and Hong Kong
during March challenged the manufacturing capacity and
logistics, resulting in shipment delays and disruption of the
supply chain. The current logistics situation in China and
globally is highly volatile and unpredictable, and while
manufacturing capacity is generally available, the situation
remains volatile and unpredictable.
Market development
In Q1 2022, the demand in GN Audio’s core enterprise
addressable markets continued to be strong driven by flexible
working, significant uptake of Unified Communications
platforms and other attractive megatrends. For the coming
years, GN Audio expects that the markets will continue its
favorable trends and that the overall addressable market will
grow at around 10% in value when assuming a stable macro
environment and supply situation.
Management quote
“The significant impact from the manufacturing, logistics, and
components challenges that slowed our growth in late 2021
unfortunately continued in Q1 2022. We continue to see
strong demand across our product categories, which makes
us very comfortable about the robustness of the underlying
trends and dynamics that drive the industry, but right now
the growth is solely supply driven and impacted by the
COVID-19 situation in China.”
René Svendsen-Tune, CEO of GN Audio
(DKK million) Q1 2022 YTD 2022
Revenue - -
Production costs -142 -142
Gross profit -142 -142
Development costs - -
Selling and distribution costs - -
Management and administrative expenses -77 -77
Other operating income and costs, net - -
EBITA -219 -219
714
532
488
475
364
20.0%
21.7%
Q1 2021 Q4 2021
24.8%
17.8%
Q2 2021 Q3 2021
14.4%
Q1 2022
Adj. EBITA margin* Adj. EBITA (DKKm)*
7
Highlights Q1 2022
• In Q1 2022, GN delivered -6% revenue growth, of which
-21% was organic revenue growth, leading to a revenue of
DKK 3,859 million, constrained by the challenging global
supply chain situation and on an exceptionally high
comparison base
• Adj. EBITA was DKK 264 million and free cash flow excl.
M&A was DKK -557 million driven by the decrease in
reported earnings
• Adj. Leverage ended at 5.4x, reflecting the closing of the
SteelSeries transaction and the traditional seasonality in
cash flow generation
• Full year guidance confirmed
Revenue
GN delivered -21% organic revenue growth in Q1 2022.
Revenue growth was -6% including around 12% impact from
M&A, reflecting Lively and SteelSeries. The impact from the
development in foreign exchange rates was around 3%.
GN Store Nord revenue development
Earnings and other financial highlights
EBITA in Other amounted to DKK -59 million in Q1 2022,
compared to DKK -59 million in Q1 2021. GN Store Nord’s
adj. EBITA was DKK 264 million compared to DKK 753 million
in Q1 2021, primarily driven by the lower revenue level and
the consolidation of Lively and SteelSeries. This corresponds
to an adj. EBITA margin of 6.8% in Q1 2022 compared to
18.3% in Q1 2021. Reported EBITA was DKK 16 million,
reflecting non-recurring items of DKK -248 million due to
supply chain initiatives in GN Hearing and the transaction and
integration costs of SteelSeries in GN Audio.
GN Store Nord adj. EBITA development
*Excluding non-recurring items
In Q1 2022, amortization of acquired intangible assets
amounted to DKK -103 million compared to DKK -41 million
reflecting the consolidation of SteelSeries. Financial items
were DKK -156 million in Q1 2022 compared to DKK -99
million in Q1 2021, with the increase among other related to
the SteelSeries financing and related fees, of which DKK -18
million is recognized as non-recurring items. In Q1 2022, share
of profit (loss) in associates was DKK 17 million compared to
DKK -1 million in Q1 2021.
The adj. profit before tax was DKK 39 million in Q1 2022
(reported profit before tax was DKK -227 million) compared
to DKK 612 million in Q1 2021. The effective tax rate was
21.6%, translating into an adj. net profit of DKK 31 million in
Q1 2022 (reported net profit of DKK -178 million) compared
to DKK 482 million in Q1 2021.
Free cash flow excl. M&A was DKK -557 million in Q1 2022
compared to DKK -22 million in Q1 2022, mainly driven by the
lower earnings and inventory build-up of critical components.
A
dj. earnings per share (Adj. EPS), was DKK 0.77 in Q1 2022
compared to DKK 3.91 in Q1 2021.
GN Store Nord adj. EPS development
*Excluding non-recurring items and amortization of acquired intangible assets
By the end of Q1 2022, equity in GN Store Nord amounted to
DKK 6,016 million compared to DKK 6,229 million in Q4
2021. The decrease was driven by the net loss for the period
and the yearly dividend payment.
Closing of the acquisition of SteelSeries – an ideal strategic
fit and access to the fast-growing gaming market
On January 12, 2022, GN announced closing of the
acquisition of SteelSeries - a global innovation driven pioneer
in premium software-enabled gaming gear. Following the
closing, GN has gained a very strong position in the attractive
high-end gaming gear market.
GN Store Nord
4,110
3,778
3,787
4,100
3,859
46%
Q4 2021
2%
Q3 2021Q1 2021 Q2 2021
49%
-2%
-21%
Q1 2022
Organic growth Revenue (DKKm)
3.91
3.55
3.70
4.13
0.77
Q3 2021Q1 2021 Q2 2021 Q1 2022Q4 2021
Adj. EPS (DKK)*
753
635
625
651
264
16.5%
Q4 2021
18.3%
16.8%
Q1 2021 Q2 2021 Q3 2021
15.9%
6.8%
Q1 2022
Adj. EBITA margin* Adj. EBITA (DKKm)*
8
The total purchase price for SteelSeries amounted to DKK 8.0
billion on a cash and debt free basis financed through existing
cash balances and new debt with financial leverage impact
from the closing date.
Capital structure
Net interest-bearing debt was DKK 14,227 million by the end
of Q1 2022 compared to DKK 5,358 million in Q4 2021, which
was primarily driven by the closing of the SteelSeries
acquisition, the traditional cash flow seasonality and the
yearly dividend payment. As a result, the adj. leverage
increased to 5.4x compared to 1.7x by the end of Q4 2021,
reflecting the debt development and the lower adj. EBITDA.
Reported leverage ratio was 6.1x reflecting the DKK -248
million non-recurring items in Q1 2022.
With the recent M&A activity and in line with expectations,
GN Store Nord’s financial leverage ratio is currently above the
long-term leverage target of 1-2x NIBD/EBITDA. As a result,
GN Store Nord will focus on de-leveraging in order to be
within its capital structure policy again within a couple of
years. As a consequence, GN Store Nord’s share buyback
program has been paused for the time being.
During Q1 2022, GN distributed DKK 214 million to
shareholders through the annual dividend payment. In March
2022, GN paid out DKK 1.55 per share in respect of the fiscal
year 2021, as approved at the Annual General Meeting in
2022.
In line with the last couple of years, GN continues to
proactively secure a diversified funding profile. The diverse
sources of financing now available to GN include the
convertible bond market (via the listed convertible bond),
traditional bonds (via the Euro Medium-Term Note program),
the short-term Euro Commercial Paper Program, bilateral
loan facilities provided by EIB as well as uncommitted bank
facilities including overdraft lines.
Foreign exchange exposure
GN has hedged a substantial part of the expected net cash-
flow in foreign currencies to secure the EBITA contribution of
the material trading currencies for the next 12 months across
both GN Hearing and GN Audio.
9
Financial guidance 2022
Organic revenue
growth
Adjusted EBITA
margin
4)
Non-recurring items
(DKK million)
5)
Growth in
adjusted EPS
6)
GN Hearing
- Core business organic
5-10%
~14%
~ -150
- Emerging Business
1)
(DKK million)
~ -190
GN Audio
2) 3)
~20%
~ -400
- GN Audio organic
>5%
- SteelSeries
>10%
Other (DKK million)
~ -190
GN Store Nord
>10%
Note 1) Emerging Business mainly includes the Lively acquisition
Note 2) The SteelSeries organic revenue growth will be reported as M&A growth for GN Audio
Note 3) GN Audio and SteelSeries organic revenue growth constrained by the current global supply chain situation
Note 4) Excluding non-recurring items
Note 5) 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 SteelSeries
Note 6) Compared to 2021 adjusted EPS (excluding non-recurring items and amortization and impairment of acquired intangible assets) of DKK
15.29
Based on foreign exchange rates as of May 5, 2022
Primary risk factors in relation to the financial guidance
Due to the ongoing COVID-19 pandemic and the global supply situation – which impacts GN in many ways – it must be
stressed that the basic assumptions behind the guidance remain more uncertain than normal. The situation is impacting GN’s
operational performance, predictability and visibility across markets, channels and supply chain. The financial guidance is
contingent on no new significant local restrictions due to COVID-19 and an ease of the supply chain situation in H2 2022.
Financial guidance 202
2
(Confirmed as communicated on February 10, 2022)
Forward-looking statements
The 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).
Due to the COVID-19 situation – which impacts the company in many different ways – it must be stressed that the basic
assumptions behind the guidance remain significantly more uncertain than normal.
10
Teleconference
GN will host a teleconference at 11.00 am CEST on May 5,
2022. Please visit www.gn.com to access the teleconference.
Presentation material will be available on the website
approximately one hour prior to the start of the
teleconference.
Financial calendar 2022
Interim Report Q2 2022: August 18, 2022
Interim Report Q3 2022: November 11, 2022
Forward-looking statements
The 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).
For further information please contact:
Henriette Wennicke
VP, Investor Relations & Treasury
GN Store Nord A/S
Email: hwennicke@gn.com
Tel: +45 45 75 03 33
Rune Sandager
Director, Investor Relations & Treasury
GN Store Nord A/S
Email: rsandager@gn.com
Tel: +45 45 75 92 57
Company reg. no. 24257843
Additional information
11
Note 1 – Accounting policies 18
Note 2 – Segment disclosures Q1 2022 19
Note 3 – Incentive plans 21
Note 4 – Shareholdings 21
Content
Financial statements
Financial statements
Quarterly reporting by segment
12
Regional growth composition Q1 2022
13
Consolidated income statement
14
Consolidated statement of comprehensive income
14
Consolidated balance sheet
15
Co
nsolidated statement of cash flow 16
Consolidated statement of equity
17
Notes
12
Quarterly reporting by segment
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Full year
2021
DKK million
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
Income statement
Revenue
GN Hearing
1,234
1,322
1,347
1,429
1,337
5,332
GN Audio
2,876
2,456
2,440
2,671
2,522
10,443
Total
4,110
3,778
3,787
4,100
3,859
15,775
Organic growth
GN Hearing
1%
95%
4%
2%
2%
16%
GN Audio
82%
32%
1%
-4%
-30%
22%
Total
46%
49%
2%
-2%
-21%
20%
Gross profit
GN Hearing
769
832
891
908
801
3,400
GN Audio
1,480
1,264
1,222
1,316
1,006
5,282
Total
2,249
2,096
2,113
2,224
1,807
8,682
Gross profit margin
GN Hearing
62.3%
62.9%
66.1%
63.5%
59.9%
63.8%
GN Audio
51.5%
51.5%
50.1%
49.3%
39.9%
50.6%
Total
54.7%
55.5%
55.8%
54.2%
46.8%
55.0%
Development costs
GN Hearing
-139
-154
-155
-131
-138
-579
GN Audio
-199
-168
-173
-185
-189
-725
Other *
-34
-27
-9
-15
-21
-85
Total
-372
-349
-337
-331
-348
-1,389
Selling and distribution costs and administrative expenses etc.
GN Hearing
-532
-525
-563
-558
-733
-2,178
GN Audio
-567
-564
-575
-687
-672
-2,393
Other *
-25
-23
-27
-28
-38
-103
Total
-1,124
-1,112
-1,165
-1,273
-1,443
-4,674
EBITA
GN Hearing
98
153
173
219
-70
643
GN Audio
714
532
474
444
145
2,164
Other *
-59
-50
-36
-43
-59
-188
Total
753
635
611
620
16
2,619
EBITA margin
GN Hearing
7.9%
11.6%
12.8%
15.3%
-5.2%
12.1%
GN Audio
24.8%
21.7%
19.4%
16.6%
5.7%
20.7%
Total
18.3%
16.8%
16.1%
15.1%
0.4%
16.6%
Depreciation and software amortization
GN Hearing
-42
-41
-40
-40
-38
-163
GN Audio
-33
-31
-34
-37
-45
-135
Other *
-30
-33
-32
-36
-35
-131
Total
-105
-105
-106
-113
-118
-429
EBITDA
GN Hearing
140
194
213
259
-32
806
GN Audio
747
563
508
481
190
2,299
Other *
-29
-17
-4
-7
-24
-57
Total
858
740
717
733
134
3,048
EBITA
753
635
611
620
16
2,619
Amortization and impairment of acquired intangible assets
-41
-42
-40
-103
-103
-226
Gain (loss) on divestment of operations etc.
-
-9
-
13
-1
4
Operating profit (loss)
712
584
571
530
-88
2,397
Share of profit (loss) in associates
-1
-20
9
-24
17
-36
Financial items
-99
-12
-13
34
-156
-90
Profit (loss) before tax
612
552
567
540
-227
2,271
Tax on profit (loss)
-130
-118
-121
-112
49
-481
Profit (loss)
482
434
446
428
-178
1,790
Balance sheet
Development projects
GN Hearing
1,019
1,001
989
1,014
1,026
1,014
GN Audio
508
585
655
708
859
708
Other *
-13
-12
-10
-9
-7
-9
Total
1,514
1,574
1,634
1,713
1,878
1,713
Inventories
GN Hearing
677
675
683
743
770
743
GN Audio
939
1,049
1,019
1,205
2,012
1,205
Total
1,616
1,724
1,702
1,948
2,782
1,948
Trade receivables
GN Hearing
987
1,020
1,111
1,124
1,144
1,124
GN Audio
1,670
1,721
2,057
2,169
1,975
2,169
Other *
-
2
2
-
2
-
Total
2,657
2,743
3,170
3,293
3,121
3,293
Net working capital
GN Hearing
785
862
883
1,010
1,036
1,010
GN Audio
652
662
793
837
1,646
837
Other *
-189
-136
-149
-122
-165
-122
Total
1,248
1,388
1,527
1,725
2,517
1,725
Free cash flow excl. M&A
GN Hearing
-204
123
340
-61
-175
198
GN Audio
438
371
281
198
-140
1,288
Other *
-256
16
-128
-416
-242
-784
Total
-22
510
493
-279
-557
702
Acquisitions and divestments of companies
-38
-1
-1
-314
-7,037
-354
Free cash flow
-60
509
492
-593
-7,594
348
* "Other" comprises Group Functions, GN Ejendomme and eliminations.
13
Regional growth composition Q1 2022
GN Hearing
GN Audio
Consolidated total
Q1
Q1
Q1
Q1
Q1
Q1
2022
2021
2022
2021
2022
2021
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Europe - revenue
369
354
1,223
1,694
1,592
2,048
Organic growth
2%
-5%
-36%
113%
-29%
75%
FX growth
2%
-2%
1%
-2%
1%
-2%
M&A growth
0%
0%
8%
0%
7%
0%
Revenue growth
4%
-7%
-28%
111%
-22%
73%
North America - revenue
641
571
791
735
1,432
1,306
Organic growth
1%
-7%
-26%
59%
-14%
21%
FX growth
8%
-8%
6%
-16%
7%
-11%
M&A growth
3%
-1%
28%
0%
17%
-1%
Revenue growth
12%
-16%
8%
43%
10%
9%
Rest of World - revenue
327
309
508
447
835
756
Organic growth
3%
27%
-14%
40%
-7%
34%
FX growth
3%
-6%
5%
-7%
3%
-6%
M&A growth
0%
0%
23%
0%
14%
0%
Revenue growth
6%
21%
14%
33%
10%
28%
Total revenue
1,337
1,234
2,522
2,876
3,859
4,110
Organic growth
2%
1%
-30%
82%
-21%
46%
FX growth
5%
-6%
2%
-8%
3%
-7%
M&A growth
1%
-1%
16%
0%
12%
0%
Revenue growth
8%
-6%
-12%
74%
-6%
39%
14
Consolidated income statement
Q1 2022
Q1 2021
Full Year
2021
(DKK million)
(unaud.)
(unaud.)
(aud.)
Revenue
Production costs
-2,052
-1,861
-7,093
Gross profit
Development costs
-348
-372
-1,389
Selling and distribution costs
-1,017
-848
-3,484
Management and administrative expenses
-422
-283
-1,205
Other operating income and costs, net
-4
EBITA*
Amortization and impairment of acquired intangible assets
-103
-41
-226
Gain (loss) on divestment of operations etc.
-1
Operating profit (loss)
-88
Share of profit (loss) in associates
-1
-36
Financial items
-156
-99
-90
Profit (loss) before tax
-227
Tax on profit (loss)
-130
-481
Profit (loss) for the period
-178
Attributable to:
Non-controlling interests
Shareholders in GN Store Nord A/S
-191
Earnings per share (EPS):
Earnings per share (EPS)
-1.50
Earnings per share, fully diluted (EPS diluted)
-1.49
* Excluding gain (loss) on divestments of operations etc. and amortization of acquired intangible assets but including amortization of development projects and software developed in-house.
Consolidated statement of comprehensive income
Q1 2022
Q1 2021
Full Year
2021
(DKK million)
(unaud.)
(unaud.)
(aud.)
Profit (loss) for the period
-178
Other comprehensive income
Items that will not be reclassified to profit or loss
Actuarial gains (losses)
Tax relating to actuarial gains (losses)
-10
Items that may be reclassified subsequently to profit or loss
Adjustment of cash flow hedges
-7
Foreign exchange adjustments, etc.
Tax relating to other comprehensive income
-2
-8
Other comprehensive income for the period
Total comprehensive income for the period
-63
Attributable to:
Non-controlling interests
Shareholders in GN Store Nord A/S
-76
15
Consolidated balance sheet
Mar. 31 2022
Dec. 31 2021
Sep. 30 2021
Jun. 30 2021
(DKK million)
(unaud.)
(aud.)
(unaud.)
(unaud.)
Assets
Intangible assets
Property, plant and equipment
Investments in associates
Deferred tax assets
Other non-current assets
Total non-current assets
Inventories
Trade receivables
Tax receivables
Other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity
Bank loans and issued bonds
Lease liabilities, non-current
Pension obligations
Provisions, non-current
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Bank loans
Lease liabilities, current
Trade payables
Tax payables
Provisions, current
Other current liabilities
Total current liabilities
Total equity and liabilities
16
Consolidated statement of cash flow
Q1 2022
Q1 2021
Full Year
2021
(DKK million)
(unaud.)
(unaud.)
(aud.)
Operating activities
Operating profit (loss)
-88
Depreciation, amortization and impairment
Other non-cash adjustments
Cash flow from operating activities before changes in working capital
Changes in working capital
-484
-431
-710
Cash flow from operating activities before financial items and tax
-100
Financial items, net
-53
-130
-219
Tax paid, net
-78
-102
-571
Cash flow from operating activities
-231
Investing activities
Development projects
-202
-147
-755
Investments in other intangible assets, net
-91
-58
-308
Investments in property, plant and equipment, net
-20
-242
-457
Investments in other non-current assets, net
-13
-13
Company acquisitions
-7,037
-38
-354
Company divestments
Cash flow from investing activities
-7,363
-498
-1,764
Cash flow from operating and investing activities (free cash flow)
-7,594
-60
Financing activities
Paid dividends
-155
-147
-188
Share-based payment (exercised)
Purchase/sale of treasury shares and other equity instruments
-1,166
Net proceeds from issue of EMTN bonds
Increase/decrease in bank loans and other adjustments
-54
Cash flow from financing activities
Net cash flow
-5,255
Cash and cash equivalents beginning of period
Adjustment foreign currency, cash and cash equivalents
Cash and cash equivalents, end of period
17
Consolidated statement of equity
Other reserves
Q1 2021 (DKK million)
Share
capital*
Foreign
exchange
adjustments
Hedging
reserve
Treasury
shares
Proposed
dividends
for the
year
Retained
earnings
Equity,
shareholders
in GN Store
Nord A/S
Non-
controlling
interests
Total
equity
Balance at December 31, 2020
-1,500
-21
-3,640
Profit (loss) for the period
Adjustment of cash flow hedges
Foreign exchange adjustments, etc.
Tax relating to other comprehensive
income
-2
-2
-2
Other comprehensive income for the period
Total comprehensive income for the period
Share-based payment (granted)
Share based payment (exercised)
-50
Tax related to share-based incentive plans
Reclassification of non-controlling interests
by recognizing a put option liability
-8
-5
Paid dividends
-188
-188
-188
Dividends, treasury shares
-18
Balance at March 31, 2021
-1,262
-13
-3,461
Q1 2022 (DKK million)
Balance at December 31, 2021
-1,104
-3,731
Profit (loss) for the period
-191
-191
-178
Adjustment of cash flow hedges
-7
-7
-7
Foreign exchange adjustments, etc.
Other comprehensive income for the period
-7
Total comprehensive income for the period
-7
-191
-76
-63
Share-based payment (granted)
Share-based payment (exercised)
-3
Reclassification of non-controlling interests
by recognizing a put option liability
-13
-10
Paid dividends
-198
-198
-198
Dividends, treasury shares
-16
Balance at March 31, 2022
-982
-1
-3,723
* shares of DKK 4 each
18
Note 1 – Accounting policies
This interim report has been prepared in accordance with IAS 34 “Interim Financial Reporting” as adopted by the EU and
Danish interim financial reporting requirements for listed companies.
New standards, interpretations and amendments adopted by GN Store Nord
As of January 1, 2022, GN Store Nord adopted all relevant new or revised International Financial Reporting Standards and
IFRIC Interpretations with effective date January 1, 2022, or earlier. The new or revised Standards and Interpretations did not
affect recognition and measurement or result in any material changes to disclosures. Apart from this, the accounting policies
applied are unchanged from those applied in the Annual Report 2021.
Please refer to the section “Accounting standards not yet adopted” in the accounting policies in the Annual Report 2021 for
information on the on-going analysis regarding accounting for the costs of configuring or customizing the supplier’s
application software in a Software-as-a-Service (SaaS) arrangement.
19
Note 2 – Segment disclosures Q1 2022
Income statement
GN Hearing
GN Audio
Other**
Consolidated total
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue
1,337
1,234
2,522
2,876
-
-
3,859
4,110
Production costs
-536
-465
-1,516
-1,396
-
-
-2,052
-1,861
Gross profit
801
769
1,006
1,480
-
-
1,807
2,249
Development costs
-138
-139
-189
-199
-21
-34
-348
-372
Selling and distribution costs
-541
-380
-476
-468
-
-
-1,017
-848
Management and administrative expenses
-174
-158
-216
-100
-32
-25
-422
-283
Other operating income and costs, net
-18
6
20
1
-6
-
-4
7
EBITA*
-70
98
145
714
-59
-59
16
753
Amortization and impairment of acquired intangible assets
-15
-24
-88
-17
-
-
-103
-41
Gain (loss) on divestment of operations etc.
-1
-
-
-
-
-
-1
-
Operating profit (loss)
-86
74
57
697
-59
-59
-88
712
Share of profit (loss) in associates
17
-1
-
-
-
-
17
-1
Financial items
-28
-68
-19
-45
-109
14
-156
-99
Profit (loss) before tax
-97
5
38
652
-168
-45
-227
612
Tax on profit (loss)
21
-1
-8
-139
36
10
49
-130
Profit (loss) for the period from continuing operations
-76
4
30
513
-132
-35
-178
482
Cash flow statement
GN Hearing
GN Audio
Other**
Consolidated total
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Operating activities before changes in working capital
75
232
325
897
-16
-28
384
1,101
Cash flow from changes in working capital
-63
-230
-313
-251
-108
50
-484
-431
Cash flow from operating activities excluding financial
items and tax
12
2
12
646
-124
22
-100
670
Cash flow from investing activities:
Development projects
-91
-61
-111
-86
-
-
-202
-147
Other
-38
-58
-7,045
-42
-78
-251
-7,161
-351
Cash flow from operating and investing activities before
financial items and tax
-117
-117
-7,144
518
-202
-229
-7,463
172
Tax and financial items
-82
-122
-9
-83
-40
-27
-131
-232
Cash flow from operating and investing activities (free
cash flow)
-199
-239
-7,153
435
-242
-256
-7,594
-60
Cash flow from M&A activities
-24
-35
-7,013
-3
-
-
-7,037
-38
Free cash flow excl. M&A
-175
-204
-140
438
-242
-256
-557
-22
Additional information
GN Hearing
GN Audio
Other**
Consolidated total
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue distributed geographically
Denmark
18
22
47
81
-
-
65
103
Europe
351
332
1,176
1,613
-
-
1,527
1,945
North America
641
571
791
735
-
-
1,432
1,306
Rest of World
327
309
508
447
-
-
835
756
Revenue
1,337
1,234
2,522
2,876
-
-
3,859
4,110
Incurred development costs
-150
-110
-229
-241
-22
-35
-401
-386
Capitalized development costs
91
61
111
86
-
-
202
147
Amortization, impairment and depreciation of development
projects***
-79
-90
-71
-44
1
1
-149
-133
Expensed development costs
-138
-139
-189
-199
-21
-34
-348
-372
EBITDA
-32
140
190
747
-24
-29
134
858
Depreciation and software amortization
-38
-42
-45
-33
-35
-30
-118
-105
EBITA*
-70
98
145
714
-59
-59
16
753
EBITA margin
-5.2%
7.9%
5.7%
24.8%
N/A
N/A
0.4%
18.3%
Number of employees, end of period
4,690
4,458
2,730
2,019
325
259
7,745
6,736
* Excluding gain (loss) on divestments of operations etc. and amortization of acquired intangible assets but including amortization of development projects and software developed in-house.
** "Other" comprises Group Shared Services, GN Ejendomme and eliminations
*** Does not include amortization of acquired intangible assets, cf. definition of EBITA
20
Note 2 – Segment disclosures Q1 2022 (Continued)
Balance sheet
GN Hearing
GN Audio
Other*
Consolidated total
Mar. 31
Mar. 31
Mar. 31
Mar. 31
Mar. 31
Mar. 31
Mar. 31
Mar. 31
2022
2021
2022
2021
2022
2021
2022
2021
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
ASSETS
Goodwill
4,256
3,388
6,615
1,154
-
-
10,871
4,542
Development projects
1,026
1,019
859
508
-7
-13
1,878
1,514
Other intangible assets
274
386
2,707
368
633
404
3,614
1,158
Property, plant and equipment
463
512
411
323
455
408
1,329
1,243
Investments in associates
133
513
13
-
34
24
180
537
Deferred tax assets
376
360
46
147
-77
-102
345
405
Loans to dispensers and ownership interests
979
793
-
-
-
-
979
793
Other financial assets
442
496
2
-
-
-
444
496
Total non-current assets
7,949
7,467
10,653
2,500
1,038
721
19,640
10,688
Inventories
770
677
2,012
939
-
-
2,782
1,616
Trade receivables
1,144
987
1,975
1,670
2
-
3,121
2,657
Receivables from group companies**
-
-
-
1,673
-
-1,673
-
-
Tax receivables
89
40
132
122
-53
-135
168
27
Other receivables
344
232
401
119
104
78
849
429
Cash and cash equivalents
180
218
292
173
487
1,507
959
1,898
Total current assets
2,527
2,154
4,812
4,696
540
-223
7,879
6,627
Total assets
10,476
9,621
15,465
7,196
1,578
498
27,519
17,315
EQUITY AND LIABILITIES
Equity
5,957
5,224
5,177
4,236
-5,118
-3,555
6,016
5,905
Bank loans and issued bonds
-
-
20
-
10,655
5,445
10,675
5,445
Lease liabilities, non-current
182
221
72
79
48
20
302
320
Pension obligations
-
29
7
6
-
-
7
35
Provisions, non-current
73
120
105
117
4
-
182
237
Deferred tax liabilities
268
260
655
156
-50
-52
873
364
Other non-current liabilities
453
343
260
155
2
-
715
498
Total non-current liabilities
976
973
1,119
513
10,659
5,413
12,754
6,899
Bank loans
1
22
10
6
4,061
324
4,072
352
Lease liabilities, current
79
75
45
32
13
8
137
115
Trade payables
271
228
899
751
59
39
1,229
1,018
Amounts owed to group companies**
2,081
2,021
6,103
-
-8,184
-2,021
-
-
Tax payables
25
12
141
125
-124
62
42
199
Provisions, current
135
183
128
208
-
-
263
391
Other current liabilities
951
883
1,843
1,325
212
228
3,006
2,436
Total current liabilities
3,543
3,424
9,169
2,447
-3,963
-1,360
8,749
4,511
Total equity and liabilities
10,476
9,621
15,465
7,196
1,578
498
27,519
17,315
Invested capital***
7,826
6,580
12,005
2,680
912
610
20,743
9,870
Average invested capital
7,203
6,913
7,343
2,821
761
503
15,307
10,237
* "Other" comprises Group Shared Services, GN Ejendomme and eliminations
** Net amount
*** Includes Net working capital (Inventories, Trade receivables, Other receivables, Trade payables and Other current liabili
ties), Goodwill, Development projects, Other intangible assets,
Property, plant and equipment, Loans to dispensers and ownership interests and Provisions
21
Note 3 – Incentive plans
As of March 31, 2022, the total number of outstanding warrants in GN Hearing was 1,474 (0.2% of the shares issued in GN
Hearing). The total number of outstanding warrants in GN Audio was 1,430 (0.4% of the shares issued in GN Audio). The total
number of outstanding options in GN Store Nord is 3,109,804 (2.3% of the shares issued in GN Store Nord)
Note 4 – Shareholdings
On March 31, 2022, members of the board of directors and the executive management, respectively, own 79,808 and 131,739
shares in GN Store Nord.
On March 31, 2022, GN owns 10,426,282 treasury shares, equivalent to 7.5% of the 138,175,982 shares issued.
The GN stock is 100% free float, and the company has no dominant shareholders. APG Asset Management N.V. has reported
an ownership interest in excess of 5% of GN’s share capital. Foreign ownership of GN is estimated to be around 70%.
Note 5 – Acquisition of companies and operations
On January 12 2022, GN Audio acquired 100% of the Danish based company SteelSeries Group A/S, a global pioneer in
premium software-enabled gaming gear. SteelSeries, with its attractive growth profile and margin structure, presents an
attractive new growth opportunity for GN. The acquisition of SteelSeries will bring complementary engineering competencies,
commercial capabilities, differentiated brands, a large customer base and an innovative high-growth product offering, adding
further technical expertise and IP to GN. SteelSeries will benefit from GN‘s commercial and operational excellence, and
financial strength, allowing SteelSeries to continue its strong growth trajectory and take share in the fast-growing market for
premium software-enabled gaming gear.
Based on GN’s successful track-record of integrating acquired assets, it is anticipated that the combination will produce
significant scaling opportunities and revenue synergies when combining SteelSeries with GN’s extensive global distribution
footprint. Goodwill comprises the expected synergies as well as the value of SteelSeries highly skilled workforce.
The goodwill of DKK 5,407 million relating to this transaction is allocated to the cash-generating unit GN Audio. Goodwill of
DKK 0 million has been determined to be deductible for tax purposes.
DKK million
SteelSeries
Identifiable assets acquired, liabilities assumed and consideration transferred
Patents, rights and other intangibles
1,036
Customer relationships
747
Trademarks
762
Property plant and equipment and non-current assets
92
Current assets
1,270
Cash
227
Bank debt and non-current liabilities
-1,050
Deferred tax liabilities
-573
Other current liabilities
-678
Fair value of identified net assets
1,833
Goodwill
5,407
Consideration transferred
7,240
Acquired cash and cash equivalents
-227
Cash consideration paid
7,013
DKK million
SteelSeries
The share of revenue and profit (loss) for the period from the acquisition date can be specified as follows:
Revenue
450
Profit (loss) before tax*
-163
* Includes effect of PPA adjustments on inventory and amortization of acquired intangible assets
22
Statement by the Executive
Management and the Board of
Directors
Executive Management
Board of Directors
23
Co.reg. no 24257843