GN announced in its Interim Report Q2 2022 that GN Store Nord in Q2 2022 delivered 29% revenue growth of which 8% was organic, driven by strong Enterprise and Hearing performance. It said that global supply chain situation is improving but remains challenging. The guidance revision is to reflect consumer sentiment: A significant reduction of SteelSeries guidance; reduction of GN Audio organic revenue growth guidance driven by Consumer business sentiment; GN Hearing confirming the lower end of the guidance range.

Related article: GN Hearing Launches Custom Made by ReSound Hearing Aids

– – GN Store Nord

  • In the GN Interim Report Q2 2022, GN delivered 29% revenue growth, of which 8% was organic, leading to a revenue of DKK 4,857 million. A strong improvement of DKK 1 billion compared to Q1 2022, according to the company;
  • The global supply chain situation is improving, but continues to be challenging; 
  • Adj. EBITA was DKK 610 million and free cash flow excl. M&A was DKK -412 million driven by net working capital and investments in growth opportunities;
  • Adj. Leverage ended at 5.7x, reflecting M&A activities and timing effects of the earnings profile;
  • August 17, GN signed mandate documents with its commercial banking group for a three-year EUR 520 million loan to cover its short-term funding requirements.

– – GN Hearing

  • In the GN Interim Report Q2 2022, GN Hearing delivered revenue growth of 16% in Q2 2022, of which 4% was organic. The growth was driven by “strong performance in Europe while negatively impacted by COVID-19 restrictions in China and consumer sentiment in the US.” Adj. EBITA margin was 6.6% in the Core business driven by higher freight and material costs, investments in launch activities, and the development in FX;
  • The Emerging business, primarily Lively, delivered another strong quarter with 79% organic revenue growth. EBITA was DKK -49 million; 
  • Free cash flow excl. M&A was DKK -326 million driven by the lower reported earnings level and investments in growth opportunities; 
  • ReSound OMNIA, announced on August 16, addresses the No. 1 hearing aid challenge: hearing speech in noise. ReSound OMNIA delivers an 150% improvement in speech understanding in noisy environments, according to GN;
  • The company’s first custom rechargeable hearing aids, “Custom made by ReSound,” launched in June 2022;
  • Financial guidance confirmed for the lower end of the guidance range. 

– – GN Audio

In the GN Interim Report Q2 2022, GN Audio delivered revenue growth of 36% in Q2 2022, of which 10% was organic, driven by 18% organic revenue growth in the B2B Enterprise segment despite constraints from an improving yet challenging global supply chain situation. The growth was negatively impacted by a -25% organic revenue growth in the Consumer business, which now accounts for less than 20% of GN Audio organic, according to GN;

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SteelSeries delivered organic revenue growth of -30% while gaining market share in a significantly declining market, impacted by a “challenged supply chain and lower consumer sentiment;”

Adj. EBITA margin was 18.0%, reflecting investments in growth opportunities, higher freight and material costs, the development in FX, and the consolidation of SteelSeries; 

Free cash flow excl. M&A was DKK 49 million reflecting “strong execution in a challenging environment but offset by inventory build-up of critical components and trade receivables;” 

Financial guidance revision to reflect consumer sentiment: Significant reduction of SteelSeries organic revenue guidance; reduction of GN Audio organic revenue growth guidance due to Consumer business sentiment; and revision of adj. EBITA margin for GN Audio primarily due to FX.

Gitte Aabo, CEO of GN Hearing, said, “In Q2, GN Hearing delivered solid revenue growth despite soft market conditions in the US and COVID-19 restrictions in China. Our innovative R&D engine is at full speed with five exciting products launched this year, the most recent being ReSound OMNIA which delivers an outstanding 150% improvement in speech understanding in noise. GN Hearing now offers a fresh and very strong portfolio of solutions addressing the diverse needs, experiences, and desires people have when handling their hearing difficulties.”

René Svendsen-Tune, CEO of GN Audio, said, “GN Audio delivered strong growth in the B2B Enterprise business on top of the very high comparison base from last year, thanks to strong execution from our dedicated teams across the world. Right now, we are seeing an easing of the component situation but we are still constrained, and supply continue to run below demand. Consumer sentiment is low impacting the markets in which our Consumer business and SteelSeries operate, but the demand for our Enterprise products continues to be very strong.”

Financial overview Q2 2022

 GN Store Nord*GN HearingGN Audio
DKK million Core businessEmerging businessGN HearingGN Audio OrganicSteelSeriesGN Audio
Revenue4,8571,488411,5292,8414873,328
Organic growth8%4%79%4%10%-30%10%
Adj. EBITA**61098-4949  600
Adj. EBITA margin**12.6%6.6% 3.2%  18.0%

* Including Other, ** Excluding non-recurring items (DKK -54 million in COGS in GN Audio, DKK -14 million in OPEX in GN Audio, DKK -16 million in COGS in GN Hearing, and DKK -27 million in OPEX in GN Hearing).

Financial guidance 2022
Guidance revision to reflect consumer sentiment: Significant reduction of SteelSeries guidance; reduction of GN Audio organic revenue growth guidance driven by Consumer business sentiment; revision of GN Audio adj. EBITA margin primarily driven by FX; GN Hearing confirming the lower end of the guidance range, according to GN. Consequently, GN Store Nord now expects growth in adj. EPS between -10% to 0%, the company says.

Financial guidance 2022 (previous)

 Organic revenue growthAdjusted EBITA margin4)Non-recurring items (DKK million) 5)Growth in 
adjusted EPS6)
GN Hearing    
– Core business organic5-10%~14%~ -150 
– Emerging Business1) (DKK million) ~ -190  
GN Audio2) 3) ~20%~ -400 
– GN Audio organic>5%   
– SteelSeries>10%   
Other (DKK million) ~ -190  
GN Store Nord   >10%

Financial guidance 2022 (Updated as of August 17)

 Organic revenue growthAdjusted EBITA margin3)Non-recurring items (DKK million) 4)Growth in 
adjusted EPS5)
GN Hearing    
– Core business organic5-8%~14%~ -150 
– Emerging Business1) 8) (DKK million) ~ -200  
GN Audio2) 8) 17-18%~ -400 
– GN Audio organic6)0-5%   
– SteelSeries7)>-25%   
Other (DKK million) ~ -190  
GN Store Nord   -10% to 0%

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) Excluding non-recurring items 
Note 4) 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 5) Compared to 2021 adjusted EPS (excluding non-recurring items and amortization and impairment of acquired intangible assets) of DKK 15.29
Note 6) The growth assumption for the Enterprise business, which accounts for more than 80% of the GN Audio organic business, is unchanged and the Enterprise business is still expected to grow double-digit in H2 2022. The market in which the Consumer business operates is now expected to decline ~25% in 2022 due to lower consumer sentiment resulting in a significant negative growth assumption for the GN Audio Consumer business in 2022
Note 7) Addressable gaming gear market is now estimated to decline ~25% in 2022 to reflect consumer sentiment
Note 8) Reflecting updated FX assumptions for 2022 following the significant appreciation of the USD
Financial guidance based on foreign exchange rates as of August 17, 2022

Source: GN