GN Store Nord, Copenhagen, Denmark, issued its third quarter (Q3) 2018 corporate report, showing the company delivered 12% organic revenue growth and an EBITA margin increased to 18.0% as a function of strong operational execution, said the company. GN’s earnings per share increased by 10% compared to the same period last year. In the United States, GN is the parent group of ReSound, Beltone, Interton, Audigy, HearUSA, and maintains an alliance with implant manufacturer Cochlear.
The big driver for GN in 2018 has been its Audio headset division. GN Audio delivered an exceptionally strong 20% organic revenue growth in Q3 2018, reflecting strong, broad-based performance across businesses, geographies, and channels. Revenue growth was 22% including around 1% impact from the development in foreign exchange rates and 1% impact from M&A.
According to GN, its Hearing division delivered 6% organic revenue growth in Q3 2018 driven by continued strong growth in the independent market and encouraging feedback from the August launch of ReSound LiNX Quattro™, what the company calls the “world’s first Premium-Plus hearing aid.” Revenue growth was 5% including around a 2% impact from the development in foreign exchange rates and 1% impact from mergers and acquisitions (M&A). This was viewed by analysts as good news in light of the company dropping to 13% market share in the VA in October, with the company anticipating to recover ground with the Quattro launch.
“In Q3, we launched our new Premium-Plus hearing aid ReSound LiNX Quattro, which was very positively received by audiologists and users,” said Marcus Desimoni, Interim CEO of GN Hearing following last month’s resignation of Anders Hedegaard. “Also, in the quarter we continued our strong performance in the important independent market. With this, together with strong demand for our ReSound LiNX 3D product family, we are well on track to deliver on our objectives for 2018.”
The company confirmed its 2018 financial guidance.
GN also announced the following financial highlights:
- Continued strong cash conversion at 76% in Q3 2018.
- EBITA increased 5% to DKK 269 million. The EBITA margin reached 19.3%, in line with Q3 2017, reflecting a strong gross margin increase, but off-set by the development in foreign exchange rates as well as some launch costs.
- Free cash flow excluding M&A was DKK 182 million in Q3 2018, translating into a cash conversion of 68%.
- New product launches support GN Audio’s strong current momentum and fortifies its position as innovation leader.
- EBITA increased 25% to DKK 224 million. The EBITA margin increased 0.5 percentage points vs Q3 2017 and reached 19.2%.
- Free cash flow excluding M&A was DKK 226 million in Q3 2018 compared to DKK 164 million in Q3 2017. Cash conversion was 101%.
“Q3 2018 was yet another very strong quarter for GN Audio with strong, broad-based organic revenue growth,” said René Svendsen-Tune, CEO of GN Audio. “I’m very pleased with the strong execution and performance across the entire organization. Our CC&O business continued to deliver market leading double-digit organic revenue growth, and our consumer business continued its recent momentum and delivered strong organic revenue growth.”