GN Hearing, the Denmark-based parent company of ReSound, Beltone and Interton, announced today in a profit warning that it is currently experiencing delays in product development deliverables leading to postponement of key product launches planned for H2 2021. The company says these delays cannot be mitigated, and it has decided to initiate a transformation of research and development (R&D) with the objective to increase quality, predictability of delivery times, and R&D efficiency.
R&D leadership at GN has been changed with the appointment of industry veteran Günther Pausch as head of R&D.
GN had expected to bring to market two new product launches in the second half of 2021, both of which will be delayed until 2022. This is likely to affect the planned fourth-quarter launch of Jabra Enhance Plus, as well as the rollout of ResoundONE in more form factors. The division’s organic revenue growth is still pegged at about 16%. Market analysts have said that the company has been losing market share during the past year and this is likely to continue until they launch their new high-end product scheduled for next year.
However, GN’s hearing aid division is only responsible for about 35% of the company’s sales. The 2021 financial guidance for GN Audio, responsible for the other 65% of sales, is unchanged and confirmed. GN Audio—which makes Jabra headsets, and more recently Panacast cameras and branded hearing aids for Costco—did exceptionally well during the pandemic as demand for its headset products soared.
The announcement, which was widely anticipated by the financial community, included a revised financial guidance for 2021:
- The GN Hearing organic revenue growth guidance for 2021 is revised from more than 25% to around 16%;
- Due to the lower-than-expected revenue development, the GN Hearing EBITA margin guidance for 2021 is revised from more than 16% to more than 12%;
- As a consequence of the revised financial guidance for GN Hearing, GN Store Nord revises the financial guidance on growth in EPS from more than 60% to more than 50%.
GN Hearing preliminary Q3 2021 revenue is DKK 1,346 million corresponding to an organic revenue growth of 4% compared to Q3 2020. According to the company, the global hearing aid market has not fully normalized, and COVID-19 continues to impact the hearing aid markets with significant variations across countries and channels.
GN Store Nord will, as previously communicated, release its interim Q3 2021 report on October 29, 2021, with further details on the performance in Q3 2021, and will host a teleconference for investors and analysts on the same day.