1 Interim Report Q3 2023
Financial overview Q
3 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
Interim Report Q3 2023
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
flow
GN Store Nord
0%
organic growth
•
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
15%
organic growth
•
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
-8%
organic growth
•
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%”
2
Q3
Q3
YTD
YTD
Full year
2023
2022
2023
2022
2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
GN Hearing
Revenue
1,653
1,554
4,994
4,420
6,227
Revenue growth
6%
15%
13%
13%
17%
Organic growth
15%
0%
15%
2%
5%
Gross profit margin
61.6%
63.6%
60.8%
61.4%
62.7%
EBITA*
190
81
411
17
453
EBITA margin*
11.5%
5.2%
8.2%
0.4%
7.3%
ROIC (EBITA*/Average invested capital)
10%
3%
10%
3%
5%
Free cash flow excl. M&A
115
60
114
-441
-377
Cash conversion (Free cash flow excl. M&A/EBITA*)
61%
74%
28%
NA
-83%
GN Audio
Revenue
2,790
3,147
8,057
8,997
12,460
Revenue growth
-11%
29%
-10%
16%
19%
Organic growth
-8%
-2%
-9%
-9%
-7%
Gross profit margin
43.2%
42.6%
42.8%
42.8%
41.9%
EBITA*
295
440
664
1,117
1,299
EBITA margin*
10.6%
14.0%
8.2%
12.4%
10.4%
ROIC (EBITA*/Average invested capital)
7%
20%
7%
20%
17%
Free cash flow excl. M&A
215
21
375
-70
-91
Cash conversion (Free cash flow excl. M&A/EBITA*)
73%
5%
56%
-6%
-7%
GN Store Nord
Revenue
4,443
4,701
13,051
13,417
18,687
Revenue growth
-5%
24%
-3%
15%
18%
Organic growth
-0%
-1%
-1%
-5%
-3%
Gross profit margin
50.1%
49.5%
49.7%
48.9%
48.9%
EBITA*
430
489
934
1,004
1,560
EBITA margin*
9.7%
10.4%
7.2%
7.5%
8.3%
Profit (loss) before tax
295
273
295
371
725
Effective tax rate
23.1%
21.2%
23.1%
21.3%
21.4%
ROIC (EBITA*/Average invested capital)
7%
10%
7%
10%
9%
Earnings per share, basic (EPS)
1.47
1.54
1.40
1.94
4.00
Earnings per share, fully diluted (EPS diluted)
1.46
1.54
1.40
1.94
3.99
Free cash flow excl. M&A
279
-217
323
-1,186
-1,291
Cash conversion (Free cash flow excl. M&A/EBITA*)
65%
-44%
35%
-118%
-83%
Equity ratio
31.3%
23.2%
31.3%
23.2%
22.2%
Net interest-bearing debt**
11,333
15,241
11,333
15,241
14,561
Net interest-bearing debt (period-end)/EBITDA**
5.9
7.2
5.9
7.2
7.1
Outstanding shares, end of period (thousand)
145,534
127,956
145,534
127,956
127,973
Average number of outstanding shares (thousand)
145,335
127,853
136,648
127,775
127,823
Average number of outstanding shares, fully diluted (thousand)
145,411
128,139
136,768
128,133
128,126
Treasury shares, end of period (thousand)
5,361
9,238
5,361
9,238
9,220
Share price at the end of the period
127.8
134.1
127.8
134.1
159.8
Market capitalization
18,592
17,159
18,592
17,159
20,444
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 amorti
zation of development projects and software
developed in-house.
** NIBD including Loans to dispensers
** Incl. buybacks as part of share based incentive programs
Financial highlights
3
Highlights Q3 2023
• 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
Revenue
GN Hearing delivered organic revenue growth of 15%,
leading to a revenue growth of 6%, due to -7% impact
from the development in foreign exchange rates and -2%
impact from M&A. The Emerging business continued to
grow the category of this new user segment and delivered
17% organic revenue growth, while initiating a roll-out of
product offering into new channels. The Core business
delivered 15%. The strong performance was a result of the
continued momentum of ReSound OMNIA which has
driven solid double digit organic revenue growth for four
consecutive quarters.
In the first 9 months of 2023, GN Hearing delivered 15%
organic revenue growth and a revenue of DKK 4,994
million.
GN Hearing revenue development
North America
In North America, GN delivered organic revenue growth of
19% as a result of strong performance across channels.
This was driven by continued market share gains in a
market, which grew faster than the historical trends of 2-
4%. Consequently, North America delivered revenue
growth of 8% including around -9% impact from the
development in foreign exchange rates and around -2%
impact from M&A.
In the first 9 months of 2023, GN Hearing delivered strong
organic revenue growth of 19% in North America.
Europe
In Europe, GN Hearing delivered 4% organic revenue
growth with particular strong performance in France and
the UK. Consequently, Europe delivered revenue growth
of 1% including around -3% impact from M&A in relation
to the disposal of BelAudição. The market growth in
Europe is estimated to be slightly positive in the quarter.
In the first 9 months of 2023, GN Hearing delivered
organic revenue growth of 8% in Europe.
Rest of World
In the Rest of World region GN delivered 18% organic
revenue growth with particular strong performance in
China, Japan and Australia in a normalized hearing aid
market. Consequently, Rest of World delivered revenue
growth of 9% including around -9% impact from the
development in foreign exchange rates.
In the first 9 months of 2023, GN Hearing delivered
organic revenue growth of 15% in the Rest of World
region.
Earnings and other financial highlights
Adj. gross profit reached DKK 1,025 million in Q3 2023
corresponding to a gross margin of 62.0% compared to
65.3% in Q3 2022. The decline in gross margin was driven
by retail disposals including BelAudição and Beltone
corporate retail and well as increasing input costs.
Compared to Q2 2023, the gross margin increased 1
percentage points due to declining input costs.
In the first 9 months of 2023, GN Hearing delivered an adj.
gross margin of 61.5%.
OPEX was prudently managed during the quarter with a
reduction in selling and distribution costs as well as R&D,
offset by increasing general and administrative expenses
primarily due to IT. Consequently, total OPEX excl. non-
recurring items and hedging effects decreased by 6%
compared to Q3 2022.
GN Hearing
Fourth consecutive quarter of strong performance by ReSound OMNIA leading to
1
5% organic revenue growth and significant market share gains across regions.
Launch of ReSound Nexia
to sustain innovation leadership. Financial guidance
narrowed
1,495
1,742
1,560
1,658
1,590
59
Q3 2022
65
Q4 2022
62
Q1 2023
61
Q2 2023
1,554
1,807
1,622
1,719
Q3 2023
63
1,653
Revenue Emerging business (DKKm)
Revenue Core business (DKKm)
Org.
growth
15% 15%0% 1
4% 15%
4
GN Hearing’s adj. EBITA was DKK 219 million, with the Core
business delivering adj. EBITA of DKK 261 million, equal to an
EBITA margin of 16.4% compared to 10.6% in Q3 2022. The
development reflects the significant market share gains on
top of tightly managed OPEX driving operating leverage.
Compared to Q2 2023, the adj. EBITA margin in the Core
business increased 2.3 percentage points as a function of
gross margin improvements and operating leverage. The
Emerging business delivered an EBITA of DKK -42 million due
to continued investments in lead generation to drive topline
growth. Reported EBITA amounted to DKK 190 million
reflecting non-recurring items of DKK -29 million.
In the first 9 months of 2023, the adj. EBITA margin in the
Core business was 13.5%, while the adj. EBITA margin in GN
Hearing was 10.5%.
GN Hearing adj. EBITA development
*Excluding non-recurring items
Free cash flow excl. M&A was DKK 115 million in Q3 2023
compared to DKK 60 million in Q3 2022, mainly driven by
stronger earnings. Following the disposal of BelAudição,
reported free cash flow was DKK 556 million. In the first 9
months of 2023, free cash flow excl. M&A was DKK 114
million.
Non-recurring items
For Q3 2023, non-recurring items amounted to DKK -29
million as a result of continued design for manufacturing
initiatives, simplification of supply chain as well as targeted
redundancies.
GN Hearing non-recurring items
Product launches
Launching ReSound Nexia
On September 28, GN Hearing announced its next hearing aid
family ReSound Nexia, which pioneers a new era of hearing
through sound, design and connectivity. ReSound Nexia
delivers exceptional speech understanding in noisy
environments, while offering industry leading access to and
awareness of surrounding sounds. Moreover, it comes in a
new rechargeable microRIE form factor which is 25% smaller
than the standard RIE ensuring best possible on-ear comfort
without compromising on performance. ReSound Nexia is the
first hearing aid in the industry equipped with Bluetooth® LE
Audio, the new standard for connectivity. It allows multiple
simultaneous connections and hands-free calls with other
compatible devices, as well as higher sound quality with
significantly lower battery consumption. Finally, it includes
GN Hearing’s first CROS/BiCROS system developed for
people with single-sided deafness.
Market development
In Q3 2023, the market grew slightly faster than the historical
growth rates of 4-6% volume growth and -1% to -2% market
ASP decline. Following a few years of volatility the market has
now normalized. GN Hearing is projecting markets to grow at
the high-end of the structural 4-6% volume growth for 2023.
159
503
154
234
261
-40
Q3 2022
-31
Q4 2022
-41
Q1 2023
-40
Q2 2023
-42
Q3 2023
119
472
113
194
219
Adj. EBITA Core business (DKKm)*
Adj. EBITA Emerging business (DKKm)*
Adj. EBITA
margin Core*
14.1% 16.4%
10.6%
28.9% 9.9%
(DKK million) Q3 2022 Q3 2023 YTD 2023
Revenue - - -
Production costs -26 -6 -33
Gross profit -26 -6 -33
Development costs - -1 -10
Selling and distribution costs -4 -14 -41
Management and administrative expenses -8 -8
-31
Other operating income and costs, net - - -
EBITA
-38 -29 -115
5
Highlights Q3 2023
• 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 significant 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%”
Revenue
Compared to Q2 2023, GN Audio increased revenue by 4%
leading to a revenue of DKK 2,790 million, equal to an organic
revenue growth of -8% due to the high comparison base from
Q3 2022. Revenue growth was -11%, while the impact from
the development in foreign exchange rates was -3%.
As a result of continued execution, Enterprise revenue was
DKK 1,838 million, which was in line with Q2 2023 and equal
to an organic revenue growth of -13% due to the high
comparison base from Q3 2022, which was benefitting from
an easing supply chain. Following a few years of significant
market volume declines in the Enterprise markets, Q3 2023
saw general volume stabilization.
Strong performance in the consumer-oriented businesses led
to 17% growth for these businesses combined compared to
Q2 2023 in stabilizing markets. SteelSeries continued to take
market shares globally in the premium gaming gear market,
leading to a strong organic revenue growth of 10% resulting
in absolute revenue of DKK 623 million. The Consumer
business delivered revenue of DKK 329 million, equal to an
organic revenue growth of -8% due to the narrowed product
portfolio, while preparing for the important fourth quarter
with innovation leading product launches.
In the first 9 months of 2023, GN Audio delivered organic
revenue growth of -9% and a revenue of DKK 8,057 million.
GN Audio revenue development
North America
In North America, GN Audio delivered -11% organic
revenue growth due to a challenging comparison base
from last year. The Enterprise market saw its stabilization
trend from Q2 2023 continue into Q3 2023. As a result,
Q3 2023 revenue was in line with Q2 2023. Revenue
growth in North America was -18%, including around -7%
impact from the development in foreign exchange rates.
In the first 9 months of 2023, GN Audio delivered organic
revenue growth of -14% in North America.
Europe
In Europe, GN Audio delivered organic revenue growth of
-10% and revenue growth of -9% as a consequence of the
high comparison base from last year. The overall revenue
in Europe in Q3 2023 was in line with the level realized in
Q2 2023 due to a stabilizing market.
In the first 9 months of 2023, GN Audio delivered -9%
organic revenue growth in Europe.
Rest of World
In the Rest of World region, GN Audio delivered 1%
organic revenue growth, while revenue growth was -7%
with -8% impact from the development in foreign
exchange rates. The overall revenue in Rest of World was
materially stronger in Q3 2023 compared to Q2 2023.
In the first 9 months of 2023, GN Audio delivered -3%
organic revenue growth in Rest of World.
Earnings and other financial highlights
GN Audio delivered gross profit of DKK 1,205 million in Q3
2023, equal to a gross margin of 43.2% compared to
42.6% in Q3 2022. The development reflects the business
mix as well as ongoing promotional activities in the
GN Audio
Focused commercial excellence in Enterprise and continued market share gains
in SteelSeries
led to sequential improvement in revenue and EBITA. Financial
guidance narrowed
2,175
2,237
1,767
1,861
1,838
596
784
540
623
376
442
Q3 2022 Q4 2022
285
Q1 2023
271
543
Q2 2023
329
Q3 2023
3,147
3,463
2,592
2,675
2,790
Revenue Consumer (DKKm)
Revenue SteelSeries (DKKm)
Revenue Enterprise (DKKm)
Org.
growth
-18% -8%
-2% -3%
2%
6
consumer-oriented businesses, but more than offset by a
positive impact from easing freight costs and FX.
OPEX was prudently managed during the quarter with
sustainable cost savings being executed, leading to OPEX
excl. non-recurring items and hedging effects decreasing
by 4% compared to Q3 2022. Compared to Q2 2023,
OPEX excl. non-recurring items decreased with 6%.
GN Audio’s adj. EBITA ended at DKK 331 million,
translating into an adjusted EBITA margin of 11.9%,
compared to 14.6% in Q3 2022. The development reflects
the revenue decline, partly off-set by tightly managed
OPEX. Compared to Q2 2023, the adj. EBITA margin
increased by 2.4 percentage points reflecting the revenue
increase and cost reduction initiatives. Reported EBITA
was DKK 295 million, reflecting DKK -36 million in non-
recurring items. In the first 9 months of 2023, GN Audio
delivered an adj. EBITA margin of 9.5%.
GN Audio adj. EBITA development
*Excluding non-recurring items
Free cash flow excl. M&A was DKK 215 million compared
to DKK 21 million in Q3 2022. The strong increase in cash
flow was mainly driven by continued prudent cost
management and well-managed working capital. In the
first 9 months of 2023, free cash flow excl. M&A was DKK
375 million.
Non-recurring items
Acknowledging the uncertain environment, GN Audio
continued to take actions to reduce the cost base and defend
the agility of the company. For this purpose, GN Audio
booked non-recurring items of DKK -36 million in Q3 2023
related to cost reduction measures.
GN Audio non-recurring items
Product launches
Shipping of Jabra PanaCast 50 Video Bar System
During September, GN Audio started shipment of the
PanaCast 50 Video Bar System, which is an integrated
solution, that includes an Android based compute unit for
easy deployment.
Launching Jabra Elite 8 & 10
Late August, GN Audio unveiled its two most advanced
earbuds ever, which strengthened its innovation leadership in
the premium true wireless category. The Jabra Elite 8 Active,
will set a new standard for durability and fit. Built for much
more than running or sports, they are designed to be durable
enough for users regardless of what they choose to do and
wherever life takes them.
Jabra Elite 10 earbuds promise the best combination of
comfort, sound and calls anywhere, for both work and life.
These true wireless earbuds, which are optimized for enjoying
content in Dolby Atmos, are truly immersive and Jabra’s first
earbuds to support Dolby Head Tracking, enabling a more
natural sound experience.
Launching SteelSeries’ Alias line of microphones
Early October, SteelSeries announced the next area for
category expansion with the launch of SteelSeries Alias - the
future of gaming microphones. The new line of microphones
powered by Sonar for Streamers creates and delivers the
ultimate streaming experience.
Market development
In Q3 2023, the Enterprise market stabilized across regions.
We expect gradually improving markets, but the timing of the
recovery path is still uncertain. While the market remains
challenged in the short-term we continue to believe in the
long term attractiveness of the market driven by hybrid
working and the continued upgrade of collaboration tools to
make the experience seamless and more efficient. The
consumer-oriented markets are continuing to see
stabilization, following the material market decline in 2022,
but with limited growth expected for 2023 as a whole. Once
the current market challenges are behind us, we expect the
market to return to growth.
461
334
181
253
331
Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Adj. EBITA (DKKm)*
9.5% 11.9%14.6% 9.6% 7.0%
Adj. EBITA
margin*
(DKK million) Q3 2022 Q3 2023
YTD 2023
Revenue - -
Production costs -
- -
Gross profit - - -
Development costs - - -37
Selling and distribution costs - -33 -33
Management and administrative expenses -21 -3 -31
Other operating income and costs, net - -
EBITA -21 -36 -101
7
Highlights Q3 2023
• 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
Revenue
GN delivered 0% organic revenue growth, leading to -5%
revenue growth, as a result of -4% impact from the
development in foreign exchange rates and -1% impact from
M&A.
In the first 9 months of 2023, GN delivered organic revenue
growth of -1%, while revenue growth was -3%.
GN Store Nord revenue development
Earnings and other financial highlights
EBITA in Other amounted to DKK -55 million, compared to
DKK -32 million in Q3 2022 driven by timing effects. GN Store
Nord’s adj. EBITA was DKK 495 million compared to DKK 548
million in Q3 2022, primarily driven by negative operating
leverage in GN Audio as a result of the revenue decline as well
as ongoing promotional activities in the consumer-oriented
businesses. This corresponds to an adj. EBITA margin of
11.1% in Q3 2023 compared to 11.7% in Q3 2022. Due to the
strong execution in the quarter, the adj. EBITA margin
increased sequentially by 1.9 percentage points. In the first 9
months of 2023, GN delivered an adj. EBITA margin of 8.8%.
Reported EBITA was DKK 430 million, reflecting non-
recurring items of DKK -65 million due to initiatives to restore
profitability across GN Hearing and GN Audio.
GN Store Nord adj. EBITA development
*Excluding non-recurring items
Amortization of acquired intangible assets amounted to DKK
-99 million compared to DKK -125 million in Q3 2022.
Financial items were DKK -91 million in the quarter compared
to DKK -90 million in Q3 2022. The development reflects the
general increase in interest rate levels, but offset by a positive
non-cash revaluation of balance sheet items due to changes
in FX. Share of profit (loss) in associates was DKK -5 million
compared to DKK -1 million in Q3 2022, while gain on
disposals were DKK 60 million in the quarter reflecting a non-
cash gain from the disposal of BelAudição.
The adj. profit before tax was DKK 360 million (reported
profit before tax was DKK 295 million) compared to DKK 332
million in Q3 2022. The effective tax rate was 23.
1%
compared to 21.2% in Q3 2022 due to a previous R&D tax
relief scheme in Denmark not being prolonged. Adj. net profit
was DKK 277 million in Q3 2023 (reported net profit of DKK
227 million) compared to DKK 262 million in Q3 2022. In the
first 9 months of 2023, adj. net profit was DKK 393 million.
Free cash flow excl. M&A of DKK 279 million compared to
DKK -217 million in Q3 2022, driven by the solid earnings
GN Store Nord
Relentless execution of capital plan leading to a DKK 740 million reduction in net
interest
-bearing debt. Future synergies of DKK ~600 million identified in relation
to
the One-GN transformation
4,701
5,270
4,214
4,394
4,443
Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Revenue (DKKm)
Org.
growth
-8% 0%-1% 3% 7%
548
744
251
404
495
Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Adj. EBITA (DKKm)*
9.2% 11.1%
11.7%
14.1% 6.0%
Adj. EBITA
margin*
8
level and a relentless focus on balance sheet items. Following
the disposal of BelAudição, free cash flow was DKK 720
million. In the first 9 months of 2023, free cash flow excl.
M&A was DKK 323 million (free cash flow of DKK 728 million).
GN Store Nord adj. EPS development
*Excluding non-recurring items and amortization of acquired intangible assets
Adj. earnings per share (Adj. EPS) was DKK 2.33 in Q3 2023
compared to DKK 2.68 in Q3 2022 driven by the increase in
earnings. In the first 9 months of 2023, GN delivered an adj.
earnings per share of DKK 4.74.
Equity in GN Store Nord amounted to DKK 9,711 million
compared to DKK 7,202 million in Q3 2022. The increase was
driven by the private placing as well as positive net profits.
Capital structure
Net interest-bearing debt decreased significantly to DKK
11,333 million in Q3 2023 compared to DKK 12,073 million by
the end of Q2 2023, driven by the strong free cash flow
generation including the disposal of BelAudição. As a result,
the adj. leverage ended at 4.9x. Reported leverage ratio was
5.9x reflecting DKK -404 million non-recurring items in the
last four quarters. By the end of Q3 2023, GN had cash and
cash equivalents of DKK 1,726 million. Moreover, GN has
access to an undrawn revolving credit facility of DKK 3.9
billion (EUR 520 million) with maturity in 2027.
Execution of capital plan
On May 24, GN announced a new capital plan to prepare for
repayment of approximately DKK 7 billion debt that matures
in 2024 and effectively pushes all material debt maturities to
2026. Execution of the four pillars of the plan continues to
progress well. The pillars are:
• Equity
: An accelerated bookbuild of a directed issue and
private placing of 17 million new shares and existing
treasury shares executed on May 24, 2023, which
generated DKK 2.6 billion net proceeds
• Debt refinancing
: New DKK 6.0 billion (EUR 800 million)
term loan facility maturing in 2026 replaced existing DKK
3.9 billion (EUR 520 million) term loan. The new loan was
signed and finalized on September 27, 2023
• Disposals
: DKK 1.0 – 2.0 billion to be generated by
disposals of selected assets. Disposal of BelAudição
announced on June 28 generated DKK ~500 million in Q3
2023. Moreover, GN has agreed a sale and leaseback of
the company’s headquarter, which will generate net
proceeds of DKK ~500 million during Q4 2023
• Operational measures: Cash at hand and positive free
cash flow excl. M&A for 2023 and 2024 at Group level;
DKK 279 million cash flow excl. M&A generated in Q3
2023, and DKK 323 million in first 9 months of 2023
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.
One-GN
GN continues to execute on its strategy built on more than
150 years of technology-driven enhancement of vital human
senses with the underlying philosophy of bringing people
closer. Over the past several years, GN has been redefined
from a hardware to a software-enabled company;
repositioned from mainly being perceived as a hearing aid
company to becoming a fully integrated innovation
powerhouse with strong positions and substantial future
growth opportunities in attractive hearing, audio, video, and
gaming markets.
As a natural next step, 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. This
includes a transformation to being governed by one Board,
one Group CEO, one Group CFO and one Executive
Leadership Team. The Board has appointed Peter Karlstromer
as Group CEO.
As part of the one company transformation, GN has identified
company-wide synergies which will support and accelerate
the margin improvement across the Group. 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. 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
are expected for 2024 to drive these synergies.
Management quote
“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.”
Peter Karlstromer, CEO of GN Store Nord
2.68
3.92
0.66
1.21
2.33
Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Adj. EPS (DKK)*
margin
9
Financial guidance 2023
Organic revenue growth Adjusted EBITA margin
2)
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 Business
1)
(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 further 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.
Financial guidance
2023
(Financial guidance is narrowed on November 10, 2023)
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 CET on November
10, 2023. 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 2024
Annual Report 2023: February 8, 2024
Annual general meeting*: March 13, 2024
Interim Report Q1 2024: May 2, 2024
Interim Report Q2 2024: August 22, 2024
Interim Report Q3 2024: November 7, 2024
* Proposals to the agenda for the GN Store Nord Annual
General Meeting must be submitted no later than six weeks
before the meeting (i.e., January 30, 2024)
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:
Anne Sofie Staunsbæk Veyhe
Vice President, Investor Relations, Treasury and M&A
GN Store Nord A/S
Email: asveyhe@gn.com
Tel: +45 45 75 85 06
Rune Sandager
Senior Director, Investor Relations
GN Store Nord A/S
Email: rsandager@gn.com
Tel: +45 45 75 92 57
GN Store Nord A/S
Lautrupbjerg 7
2750 Ballerup
Denmark
Company reg. no. 24257843
Additional information
11
Note 1 – Accounting policies 18
Note 2 – Segment disclosures Q3 2023 19
Note 2 – Segment disclosures YTD 2023 21
Note 3 – Incentive plans 21
Note 4 – Shareholdings 22
Note 5 – Divestment of companies 22
Note 6 – Restricted cash 22
Note 7 – Subsequent events 22
Content
Financial statements
Financial statements
Quarterly reporting by segment
12
Regional growth composition Q
3 2023 13
Consolidated income statement
14
Consolidated statement of comprehensive income
14
Consolidated balance sheet
15
Consolidated statement of cash flow
16
Consolidated statement of equity
17
Notes
12
Quarterly reporting by segment
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
YTD 2022
YTD 2023
Full year 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
Income statement
Revenue
GN Hearing
1,337
1,529
1,554
1,807
1,622
1,719
1,653
4,420
4,994
6,227
GN Audio
2,522
3,328
3,147
3,463
2,592
2,675
2,790
8,997
8,057
12,460
Total
3,859
4,857
4,701
5,270
4,214
4,394
4,443
13,417
13,051
18,687
Organic growth
GN Hearing
2%
4%
0%
14%
15%
15%
15%
2%
15%
5%
GN Audio
-30%
10%
-2%
-3%
2%
-18%
-8%
-9%
-9%
-7%
Total
-21%
8%
-1%
3%
7%
-8%
0%
-5%
-1%
-3%
Gross profit
GN Hearing
801
924
988
1,194
979
1,039
1,019
2,713
3,037
3,907
GN Audio
1,006
1,502
1,341
1,376
1,062
1,183
1,205
3,849
3,450
5,225
Total
1,807
2,426
2,329
2,570
2,041
2,222
2,224
6,562
6,487
9,132
Gross profit margin
GN Hearing
59.9%
60.4%
63.6%
66.1%
60.4%
60.4%
61.6%
61.4%
60.8%
62.7%
GN Audio
39.9%
45.1%
42.6%
39.7%
41.0%
44.2%
43.2%
42.8%
42.8%
41.9%
Total
46.8%
49.9%
49.5%
48.8%
48.4%
50.6%
50.1%
48.9%
49.7%
48.9%
Development costs
GN Hearing
-138
-142
-146
-124
-166
-130
-126
-426
-422
-550
GN Audio
-189
-166
-188
-238
-188
-226
-190
-543
-604
-781
Other *
-21
-16
-10
-27
-13
-14
-19
-47
-46
-74
Total
-348
-324
-344
-389
-367
-370
-335
-1,016
-1,072
-1,405
Selling and distribution costs
and administrative expenses
etc.
GN Hearing
-733
-776
-761
-634
-760
-741
-703
-2,270
-2,204
-2,904
GN Audio
-672
-804
-713
-956
-711
-751
-720
-2,189
-2,182
-3,145
Other *
-38
-23
-22
-35
-30
-29
-36
-83
-95
-118
Total
-1,443
-1,603
-1,496
-1,625
-1,501
-1,521
-1,459
-4,542
-4,481
-6,167
EBITA
GN Hearing
-70
6
81
436
53
168
190
17
411
453
GN Audio
145
532
440
182
163
206
295
1,117
664
1,299
Other *
-59
-39
-32
-62
-43
-43
-55
-130
-141
-192
Total
16
499
489
556
173
331
430
1,004
934
1,560
EBITA margin
GN Hearing
-5.2%
0.4%
5.2%
24.1%
3.3%
9.8%
11.5%
0.4%
8.2%
7.3%
GN Audio
5.7%
16.0%
14.0%
5.3%
6.3%
7.7%
10.6%
12.4%
8.2%
10.4%
Total
0.4%
10.3%
10.4%
10.6%
4.1%
7.5%
9.7%
7.5%
7.2%
8.3%
Depreciation and software
amortization
GN Hearing
-38
-41
-42
-41
-42
-41
-36
-121
-119
-162
GN Audio
-45
-48
-54
-47
-46
-45
-43
-147
-134
-194
Other *
-35
-37
-36
-21
-21
-27
-29
-108
-77
-129
Total
-118
-126
-132
-109
-109
-113
-108
-376
-330
-485
EBITDA
GN Hearing
-32
47
123
477
95
209
226
138
530
615
GN Audio
190
580
494
229
209
251
338
1,264
798
1,493
Other *
-24
-2
4
-41
-22
-16
-26
-22
-64
-63
Total
134
625
621
665
282
444
538
1,380
1,264
2,045
EBITA
16
499
489
556
173
331
430
1,004
934
1,560
Amortization and impairment
of acquired intangible assets
-103 -96 -125 -116 -102 -101 -99 -324 -302 -440
Gain (loss) on divestment of
operations etc.
-1 -6 -
-2 -1 1
60
-7 60
-9
Operating profit (loss)
-88
397
364
438
70
231
391
673
692
1,111
Share of profit (loss) in
associates
17
5
-1 -2 -1 -46 -5 21
-52 19
Financial items
-156
-77
-90
-82
-125
-129
-91
-323
-345
-405
Profit (loss) before tax
-227
325
273
354
-56
56
295
371
295
725
Tax on profit (loss)
49
-70
-58
-76
13
-13
-68
-79
-68
-155
Profit (loss)
-178
255
215
278
-43
43
227
292
227
570
Balance sheet
Inventories
GN Hearing
770
816
892
850
842
841
856
892
856
850
GN Audio
2,012
2,282
2,968
2,666
2,506
2,449
2,353
2,968
2,353
2,666
Other *
-
-8
-
-
Total
2,782
3,098
3,860
3,516
3,348
3,282
3,209
3,860
3,209
3,516
Trade receivables
GN Hearing
1,144
1,262
1,266
1,442
1,446
1,398
1,451
1,266
1,451
1,442
GN Audio
1,975
2,890
2,729
2,589
2,314
2,429
2,827
2,729
2,827
2,589
Other *
2
2
-
-
-
-13
-
-
-
-
Total
3,121
4,154
3,995
4,031
3,760
3,814
4,278
3,995
4,278
4,031
Net working capital
GN Hearing
1,036
1,078
1,052
1,323
1,380
1,281
1,196
1,052
1,196
1,323
GN Audio
1,646
2,021
2,145
1,937
2,222
1,872
1,930
2,145
1,930
1,937
Other *
-165
-319
-259
-151
-43
-102
-120
-259
-120
-151
Total
2,517
2,780
2,938
3,109
3,559
3,051
3,006
2,938
3,006
3,109
Free cash flow excl. M&A
GN Hearing
-175
-326
60
64
-132
131
115
-441
114
-377
GN Audio
-140
49
21
-21
-304
464
215
-70
375
-91
Other *
-242
-135
-298
-148
-142
27
-51
-675
-166
-823
Total
-557
-412
-217
-105
-578
622
279
-1,186
323
-1,291
Acquisitions and divestments
of companies
-7,037 -216 -15 11
-36 -
441
-7,268 405
-7,257
Free cash flow
-7,594
-628
-232
-94
-614
622
720
-8,454
728
-8,548
* "Other" comprises Group Functions, GN Ejendomme and eliminations, including held for sale classification.
13
Regional growth composition Q3 2023
GN Hearing
GN Audio
Consolidated total
Q3
Q3
Q3
Q3
Q3
Q3
2023
2022
2023
2022
2023
2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Europe - revenue
430
425
1,278
1,408
1,708
1,833
Organic growth
4%
7%
-10%
16%
-7%
14%
FX growth
0%
1%
1%
1%
1%
1%
M&A growth
-3%
17%
0%
15%
-1%
15%
Revenue growth
1%
24%
-9%
32%
-7%
30%
North America - revenue
830
770
842
1,021
1,672
1,791
Organic growth
19%
-3%
-11%
-26%
2%
-16%
FX growth
-9%
18%
-7%
12%
-8%
15%
M&A growth
-2%
2%
0%
34%
-1%
20%
Revenue growth
8%
17%
-18%
20%
-7%
19%
Rest of World - revenue
393
359
670
718
1,063
1,077
Organic growth
18%
-3%
1%
-1%
7%
-2%
FX growth
-9%
6%
-8%
10%
-8%
9%
M&A growth
0%
0%
0%
29%
0%
17%
Revenue growth
9%
3%
-7%
38%
-1%
24%
Total revenue
1,653
1,554
2,790
3,147
4,443
4,701
Organic growth
15%
0%
-8%
-2%
0%
-1%
FX growth
-7%
9%
-3%
7%
-4%
7%
M&A growth
-2%
6%
0%
24%
-1%
18%
Revenue growth
6%
15%
-11%
29%
-5%
24%
* "Other" comprises Group Shared Services, GN Ejendomme and eliminations
Regional growth composition YTD 2023
GN Hearing
GN Audio
Consolidated total
YTD
YTD
YTD
YTD
YTD
YTD
2023
2022
2023
2022
2023
2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Europe - revenue
1,436
1,269
3,885
4,232
5,321
5,501
Organic growth
8%
11%
-9%
-4%
-5%
-1%
FX growth
-1%
1%
1%
1%
1%
1%
M&A growth
6%
9%
0%
10%
1%
10%
Revenue growth
13%
22%
-8%
7%
-3%
10%
North America - revenue
2,411
2,100
2,413
2,881
4,824
4,981
Organic growth
19%
-4%
-14%
-19%
0%
-12%
FX growth
-1%
13%
-2%
11%
-2%
12%
M&A growth
-3%
2%
0%
31%
-1%
18%
Revenue growth
15%
11%
-16%
23%
-3%
18%
Rest of World - revenue
1,147
1,051
1,759
1,884
2,906
2,935
Organic growth
15%
3%
-3%
-5%
3%
-2%
FX growth
-6%
5%
-4%
8%
-4%
6%
M&A growth
0%
0%
0%
26%
0%
16%
Revenue growth
9%
8%
-7%
29%
-1%
20%
Total revenue
4,994
4,420
8,057
8,997
13,051
13,417
Organic growth
15%
2%
-9%
-9%
-1%
-5%
FX growth
-2%
7%
-1%
5%
-2%
5%
M&A growth
0%
4%
0%
20%
0%
15%
Revenue growth
13%
13%
-10%
16%
-3%
15%
* "Other" comprises Group Shared Services, GN Ejendomme and eliminations
14
Consolidated income statement
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Full Year
2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
Revenue
Production costs
-2,219
-2,372
-6,564
-6,855
-9,555
Gross profit
Development costs
-335
-344
-1,072
-1,016
-1,405
Selling and distribution costs
-1,091
-1,182
-3,310
-3,424
-4,563
Management and administrative expenses
-368
-310
-1,172
-1,104
-1,587
Other operating income and costs, net
-4
-14
-17
EBITA*
Amortization and impairment of acquired intangible assets
-99
-125
-302
-324
-440
Gain (loss) on divestment of operations etc.
-7
-9
Operating profit (loss)
Share of profit (loss) in associates
-5
-1
-52
Financial items
-91
-90
-345
-323
-405
Profit (loss) before tax
Tax on profit (loss)
-68
-58
-68
-79
-155
Profit (loss) for the period
Attributable to:
Non-controlling interests
Shareholders in GN Store Nord A/S
Earnings per share (EPS):
Earnings per share (EPS)
Earnings per share, fully diluted (EPS diluted)
* 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
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Full Year
2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
Profit (loss) for the period
Other comprehensive income
Items that will not be reclassified to profit or loss
Actuarial gains (losses)
Tax relating to actuarial gains (losses)
-2
Items that may be reclassified subsequently to profit or loss
Adjustment of cash flow hedges
-73
Foreign exchange adjustments, etc.
-34
Tax relating to other comprehensive income
-10
-13
-1
Other comprehensive income (loss) for the period
Total comprehensive income (loss) for the period
Attributable to:
Non-controlling interests
Shareholders in GN Store Nord A/S
15
Consolidated balance sheet
Sep. 30 2023
Jun. 30 2023
Mar. 31 2023
Dec. 31 2022
Sep. 30 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(aud.)
(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
Assets held for sale
Total assets
Equity and liabilities
Equity
Bank loans and issued bonds, non-current
Lease liabilities, non-current
Pension obligations
Provisions, non-current
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Bank loans and issued bonds, current
Lease liabilities, current
Trade payables
Tax payables
Provisions, current
Other current liabilities
Total current liabilities
Liabilities directly associated with assets
held for sale
Total equity and liabilities
16
Consolidated statement of cash flow
Q3 2023
Q3 2022
YTD 2023
YTD 2022
Full Year
2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
Operating activities
Operating profit (loss)
Depreciation, amortization and impairment
Other non-cash adjustments
-33
-68
-41
Cash flow from operating activities before changes in working capital
Changes in working capital
-133
-872
-1,293
Cash flow from operating activities before financial items and tax
Financial items, net
-112
-327
-291
-552
-598
Tax paid, net
-31
-45
-147
-204
-185
Cash flow from operating activities
Investing activities
Development projects
-246
-190
-743
-643
-1,005
Investments in other intangible assets, net
-55
-130
-259
-280
-454
Investments in property, plant and equipment, net
-21
-104
-53
-166
-204
Investments in other non-current assets, net
-11
-123
-233
-255
Company acquisitions
-15
-36
-7,268
-7,257
Company divestments
Cash flow from investing activities
-428
-773
-8,590
-9,175
Cash flow from operating and investing activities (free cash flow)
-232
-8,454
-8,548
Financing activities
Proceeds from share placement, net of costs
Paid dividends
-32
-198
-208
Share-based payment (exercised)
Increase/decrease in bank loans and other adjustments
-98
-2,636
Cash flow from financing activities
-60
Net cash flow
-5,359
-5,204
Cash and cash equivalents beginning of period
Adjustment foreign currency, cash and cash equivalents
-4
-14
Belaudicao - assets held for sale
Cash and cash equivalents, end of period
17
Consolidated statement of equity
Other reserves
(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, 2021
Profit (loss) for the period
Adjustment of cash flow hedges
Foreign exchange adjustments, etc.
Tax relating to
other comprehensive
income
Other comprehensive income for the
period
Total comprehensive income for the
period
Reduction of the share capital
-4
-293
Share
-based payment (granted) - - - - - 105 105 - 105
Share based payment (exercised)
-44
Reclassification of
non-controlling
interests by recognizing a put option
liability
Paid dividends*
-198
-198
-198
Dividends, treasury shares
Balance at September 30, 2022
(DKK million)
Balance at December 31, 2022
Profit (loss) for the period
Adjustment of cash flow hedges
Foreign exchange adjustments, etc.
Tax relating to other comprehensive
income
Other comprehensive income for the
period
-34
Total comprehensive income for the
period
-34
Increase of share capital
Share
-based payment (granted) - - - - - 47 47 - 47
Share
-based payment (exercised) - - - 78 - -57 21 - 21
Purchase of treasury shares
Reclassification of non
-controlling
interests by recognizing a put option
liability
Paid dividends*
Balance at September 30, 2023
* 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, 2023, GN Store Nord adopted all relevant new or revised International Financial Reporting Standards and IFRIC
Interpretations with effective date January 1, 2023, 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 2022.
19
Note 2 – Segment disclosures Q3 2023
Income statement
GN Hearing
GN Audio
Other**
Consolidated total
Q3 2023
Q3 2022
Q3 2023
Q3 2022
Q3 2023
Q3 2022
Q3 2023
Q3 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue
1,653
1,554
2,790
3,147
-
-
4,443
4,701
Production costs
-634
-566
-1,585
-1,806
-
-
-2,219
-2,372
Gross profit
1,019
988
1,205
1,341
-
-
2,224
2,329
Development costs
-126
-146
-190
-188
-19
-10
-335
-344
Selling and distribution costs
-542
-585
-549
-597
-
-
-1,091
-1,182
Management and administrative expenses
-161
-142
-171
-145
-36
-23
-368
-310
Other operating income and costs, net
-
-34
-
29
-
1
-
-4
EBITA*
190
81
295
440
-55
-32
430
489
Amortization and impairment of acquired
intangible assets
-14
-23
-85
-102
-
-
-99
-125
Gain (loss) on divestment of operations etc.
60
-
-
-
-
-
60
-
Operating profit (loss)
236
58
210
338
-55
-32
391
364
Share of profit (loss) in associates
-
-1
-
-
-5
-
-5
-1
Financial items
-51
-20
-84
-116
44
46
-91
-90
Profit (loss) before tax
185
37
126
222
-16
14
295
273
Tax on profit (loss)
-44
-8
-30
-47
6
-3
-68
-58
Profit (loss) for the period
141
29
96
175
-10
11
227
215
Cash flow statement
GN Hearing
GN Audio
Other**
Consolidated total
Q3 2023
Q3 2022
Q3 2023
Q3 2022
Q3 2023
Q3 2022
Q3 2023
Q3 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Operating activities before changes in
working capital
297
223
443
473
-27
5
713
701
Cash flow from changes in working capital
14
42
-3
-203
31
28
42
-133
Cash flow from operating activities
excluding financial items and tax
311
265
440
270
4
33
755
568
Cash flow from investing activities:
Development projects
-95
-84
-152
-106
1
-
-246
-190
Other
405
-26
5
-112
-56
-100
354
-238
Cash flow from operating and investing
activities before financial items and tax
621
155
293
52
-51
-67
863
140
Tax and financial items
-65
-95
-78
-46
-
-231
-143
-372
Cash flow from operating and investing
activities (free cash flow)
556
60
215
6
-51
-298
720
-232
Cash flow from M&A activities
441
-
-
-15
-
-
441
-15
Free cash flow excl. M&A
115
60
215
21
-51
-298
279
-217
Additional information
GN Hearing
GN Audio
Other**
Consolidated total
Q3 2023
Q3 2022
Q3 2023
Q3 2022
Q3 2023
Q3 2022
Q3 2023
Q3 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue distributed geographically
Denmark
15
26
58
62
-
-
73
88
Europe
415
399
1,220
1,346
-
-
1,635
1,745
North America
830
770
842
1,021
-
-
1,672
1,791
Rest of World
393
359
670
718
-
-
1,063
1,077
Revenue
1,653
1,554
2,790
3,147
-
-
4,443
4,701
Incurred development costs
-152
-146
-262
-220
-19
-11
-433
-377
Capitalized development costs
95
84
152
106
-
-
247
190
Amortization, impairment and depreciation
of development projects***
-69
-84
-80
-74
-
1
-149
-157
Expensed development costs
-126
-146
-190
-188
-19
-10
-335
-344
EBITDA
226
123
338
494
-26
4
538
621
Depreciation and software amortization
-36
-42
-43
-54
-29
-36
-108
-132
EBITA*
190
81
295
440
-55
-32
430
489
EBITA margin
11.5%
5.2%
10.6%
14.0%
N/A
N/A
9.7%
10.4%
Number of employees, end of period
4,311
5,018
2,547
2,777
360
370
7,218
8,165
* 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 Q3 2023 (Continued)
Balance sheet
GN Hearing
GN Audio
Other*
Consolidated total
Sep. 30
Sep. 30
Sep. 30
Sep. 30
Sep. 30
Sep. 30
Sep. 30
Sep. 30
2023
2022
2023
2022
2023
2022
2023
2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
ASSETS
Goodwill
4,501
5,003
6,870
6,897
-
-
11,371
11,900
Development projects
1,164
1,047
1,133
874
-
-4
2,297
1,917
Other intangible assets
239
490
2,336
2,637
1,080
787
3,655
3,914
Property, plant and equipment
346
476
291
408
434
445
1,071
1,329
Investments in associates
284
301
11
13
-
34
295
348
Deferred tax assets
426
411
157
157
-93
-77
490
491
Loans to dispensers and ownership interests
1,186
1,125
-
-
4
-
1,190
1,125
Other financial assets
597
536
8
2
-
-
605
538
Total non-current assets
8,743
9,389
10,806
10,988
1,425
1,185
20,974
21,562
Inventories
856
892
2,353
2,968
-
-
3,209
3,860
Trade receivables
1,451
1,266
2,827
2,729
-
-
4,278
3,995
Receivables from group companies**
-
-
-
-
-
-
-
-
Tax receivables
83
135
119
55
-43
-5
159
185
Other receivables
372
347
189
266
129
-8
690
605
Cash and cash equivalents
164
329
295
367
1,267
174
1,726
870
Total current assets
2,926
2,969
5,783
6,385
1,353
161
10,062
9,515
Assets held for sale
-
-
-
-
-
-
-
-
Total assets
11,669
12,358
16,589
17,373
2,778
1,346
31,036
31,077
EQUITY AND LIABILITIES
Equity
5,692
5,537
10,540
4,877
-6,521
-3,212
9,711
7,202
Bank loans and issued bonds, non-current
-
-
4
7
7,533
10,704
7,537
10,711
Lease liabilities, non-current
127
193
45
63
42
42
214
298
Pension obligations
-
-
7
7
-
-
7
7
Provisions, non-current
118
86
58
44
4
4
180
134
Deferred tax liabilities
307
319
633
744
-41
-50
899
1,013
Other non-current liabilities
455
517
389
301
-
2
844
820
Total non-current liabilities
1,007
1,115
1,136
1,166
7,538
10,702
9,681
12,983
Bank loans and issued bonds, current
-
1
-
10
5,999
4,959
5,999
4,970
Lease liabilities, current
56
76
35
42
4
14
95
132
Trade payables
254
353
1,259
1,400
80
102
1,593
1,855
Amounts owed to group companies**
3,212
4,003
1,088
7,263
-4,300
-11,266
-
-
Tax payables
84
10
274
136
-191
-102
167
44
Provisions, current
135
163
77
61
-
-
212
224
Other current liabilities
1,229
1,100
2,180
2,418
169
149
3,578
3,667
Total current liabilities
4,970
5,706
4,913
11,330
1,761
-6,144
11,644
10,892
Liabilities held for sale
-
-
-
-
-
-
-
-
Total equity and liabilities
11,669
12,358
16,589
17,373
2,778
1,346
31,036
31,077
Invested capital***
8,379
8,944
12,425
12,856
1,394
964
22,198
22,765
Average invested capital
8,662
7,848
12,641
7,933
1,179
859
22,482
16,640
* "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 2 – Segment disclosures YTD 2023
Income statement
GN Hearing
GN Audio
Other**
Consolidated total
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue
4,994
4,420
8,057
8,997
-
-
13,051
13,417
Production costs
-1,957
-1,707
-4,607
-5,148
-
-
-6,564
-6,855
Gross profit
3,037
2,713
3,450
3,849
-
-
6,487
6,562
Development costs
-422
-426
-604
-543
-46
-47
-1,072
-1,016
Selling and distribution costs
-1,685
-1,689
-1,625
-1,735
-
-
-3,310
-3,424
Management and administrative expenses
-522
-482
-555
-543
-95
-79
-1,172
-1,104
Other operating income and costs, net
3
-99
-2
89
-
-4
1
-14
EBITA*
411
17
664
1,117
-141
-130
934
1,004
Amortization and impairment of acquired
intangible assets
-50
-56
-252
-268
-
-
-302
-324
Gain (loss) on divestment of operations etc.
61
-7
-1
-
-
-
60
-7
Operating profit (loss)
422
-46
411
849
-141
-130
692
673
Share of profit (loss) in associates
-17
21
-1
-
-34
-
-52
21
Financial items
-153
25
-245
-182
53
-166
-345
-323
Profit (loss) before tax
252
-
165
667
-122
-296
295
371
Tax on profit (loss)
-60
-
-39
-142
31
63
-68
-79
Profit (loss) for the period
192
-
126
525
-91
-233
227
292
Cash flow statement
GN Hearing
GN Audio
Other**
Consolidated total
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Operating activities before changes in
working capital
795
438
1,084
1,339
-66
-13
1,813
1,764
Cash flow from changes in working capital
57
-61
75
-811
-6
-
126
-872
Cash flow from operating activities
excluding financial items and tax
852
377
1,159
528
-72
-13
1,939
892
Cash flow from investing activities:
Development projects, investment
-292
-271
-451
-372
-
-
-743
-643
Other investing activities
222
-519
-19
-7,135
-233
-293
-30
-7,947
Cash flow from operating and investing
activities before financial items and tax
782
-413
689
-6,979
-305
-306
1,166
-7,698
Tax and financial items
-263
-268
-314
-119
139
-369
-438
-756
Cash flow from operating and investing
activities (free cash flow)
519
-681
375
-7,098
-166
-675
728
-8,454
Cash flow from M&A activities
405
-240
-
-7,028
-
-
405
-7,268
Free cash flow excl. M&A
114
-441
375
-70
-166
-675
323
-1,186
Additional information
GN Hearing
GN Audio
Other**
Consolidated total
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue distributed geographically
Denmark
52
63
149
164
-
-
201
227
Europe
1,384
1,206
3,736
4,068
-
-
5,120
5,274
North America
2,411
2,100
2,413
2,881
-
-
4,824
4,981
Rest of World
1,147
1,051
1,759
1,884
-
-
2,906
2,935
Revenue
4,994
4,420
8,057
8,997
-
-
13,051
13,417
Incurred development costs
-489
-454
-790
-701
-49
-51
-1,328
-1,206
Capitalized development costs
292
271
451
372
-
-
743
643
Amortization, impairment and depreciation
of development projects***
-225
-243
-265
-214
3
4
-487
-453
Expensed development costs
-422
-426
-604
-543
-46
-47
-1,072
-1,016
EBITDA
530
138
798
1,264
-64
-22
1,264
1,380
Depreciation and software amortization
-119
-121
-134
-147
-77
-108
-330
-376
EBITA*
411
17
664
1,117
-141
-130
934
1,004
EBITA margin
8.2%
0.4%
8.2%
12.4%
N/A
N/A
7.2%
7.5%
Number of employees, end of period
4,311
5,018
2,547
2,777
360
370
7,218
8,165
* 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
22
Note 3 – Incentive plans
As of September 30, 2023, the total number of outstanding warrants in GN Hearing was 798 (0.1% of the shares issued in GN
Hearing). The total number of outstanding warrants in GN Audio was 199 (0.1% of the shares issued in GN Audio). The total
number of outstanding options in GN Store Nord is 3,950,927 (2.6% of the shares issued in GN Store Nord).
Note 4 – Shareholdings
On September 30, 2023, members of the board of directors and the executive management, respectively, own 76,918 and
34,250 shares in GN Store Nord.
On September 30, 2023, GN owns 5,361,240 treasury shares, equivalent to 3.6% of the 150,912,715 shares issued.
The GN stock is 100% free float, and the company has no dominant shareholders. William Demant Invest A/S has reported an
ownership interest in excess of 10%, while Norges Bank 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 – Divestment of companies
The disposal of BelAudição, Unipessoal Lda (“BelAudição”) was completed on 14 September 2023.
The transaction demonstrates GN Hearing’s commitment to its successful strategy of not owning retail and instead focusing on
being a key supplier to strong independent hearing aid dispensers. GN finalized the acquisition of BelAudição – a long-time GN
Hearing customer – in 2022 to facilitate a generational transition. GN Hearing has, therefore, carefully considered potential
buyers to back the next phase of BelAudição’s impressive growth journey while securing that GN Hearing remains a key supplier
of hearing aids to the business.
(DKK million)
Non-current assets
(461)
Current assets
(101)
Current liabilities
41
Non-current liabilities
67
Disposed net assets
(454)
Cash consideration received
485
Fair value of assets received
37
Directly attributable costs
(7)
Net proceeds
515
Gain on divestment (pre-tax)
61
Note 6 – Restricted cash
Included in the DKK1,726 million cash and cash equivalents on the Statement of Financial Position is DKK 746 million which is
restricted to be used for coming debt repayments and other related costs in accordance with the capital plan. This amount
includes the proceeds received from the sale of BelAudição.
Note 7 – Subsequent events
Subsequent to September 30 2023, GN has agreed a sale and leaseback of the Group’s headquarters in Ballerup. The
transaction is part of the new capital plan announced on May 24.
23
November 10, 2023
Executive Management
Board of Directors
24
Co.reg. no 24257843