GN announced its 2022 Interim Report Q1. An excerpt of the results are below:
- 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 (USD $37 million) and free cash flow excl. M&A was DKK -557 million (USD $-79 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 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, according to the company’s report. EBITA for the Emerging business was DKK -67 million (USD $ -9 million) driven by continued investments in future growth.
- Free cash flow excl. M&A was DKK -175 million (USD $-25 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 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 reports.
- 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, GN says.
- 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 (USD $-20 million) reflecting the decrease in reported earnings.
- Full year guidance confirmed.
Gitte Aabo, CEO of GN Hearing, said: “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.”
René Svendsen-Tune, CEO of GN Audio, said “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.”
Financial overview Q1 2022
|GN Store Nord*||GN Hearing||GN Audio|
|DKK million||Core business||Emerging business||GN Hearing||GN Audio Organic||SteelSeries||GN Audio|
|Adj. EBITA margin**||6.8%||2.0%||-3.1%||14.4%|
* Including Other, ** Excluding non-recurring items (DKK -142 million in COGS in GN Audio [USD $-20 million], DKK -77 million [USD $-11 million] in OPEX in GN Audio, DKK -3 million [USD -.42 million] in COGS in GN Hearing, and DKK -26 million [USD $-3.7 million] in OPEX in GN Hearing).
To read the full report, please click here.