BALLERUP, DENMARK — GN Hearing had a very strong finish to the year with 14% organic revenue growth in Q4 2022 driven by significant market share gains as a result of the successful ReSound OMNIA launch. Consequently, GN Hearing delivered 5% organic revenue growth in 2022, in line with the financial guidance.
Revenue growth was 17% including around 7% impact from the development in foreign exchange rates and around 5% impact from M&A. The Emerging business (JabraEnhance.com) delivered 73% organic revenue growth.
The revenue in 2022 reached DKK 6,227 million (~$895M USD), compared to DKK 5,332 million (~$766 USD) in 2021.
GN Audio executed strongly in the Enterprise business in Q4 2022 with 9% organic revenue growth. Consequently in 2022, the Enterprise business matched the all-time high revenue from 2021 despite significant market challenges. The strong performance resulted in market share gains due to a world-leading product portfolio and solid channel execution. In spite of supply chain challenges and soft market conditions SteelSeries increased their revenues quarter by quarter, and ended with a strong finish, delivering organic revenue growth of -4% in Q4 2022, resulting in market share gains. The Consumer business was challenged by reduced consumer sentiment and significant promotions, which resulted in organic revenue growth of -37% for 2022. As a result, GN Audio delivered -7% organic revenue growth in 2022, in line with the updated financial guidance. The revenue in 2022 reached DKK 12,460 million (~$1.8B USD), compared to DKK 10,443 million (~$1.5B USD) in 2021.
The acquisitions of Lively – now rebranded JabraEnhance.com – and SteelSeries are strategically important to GN Hearing and GN Audio, both doing very well in their market segments and present significant growth opportunities. The decision on how to fund the SteelSeries acquisition was taken in October 2021 under different macro-economic assumptions.
Multiple external factors presented GN with significant headwinds throughout 2022: War in Ukraine, soaring inflation, declining consumer confidence, looming recession. This came on top of continued COVID-19 market disturbances, supply chain challenges, FX headwinds, and very high freight costs.
“In accordance with GN’s announcement on November 11, 2022, GN has conducted a comprehensive review of the appropriate capital structure. In light of the macroeconomic environment and GN’s leverage, GN has announced that it intends to raise gross proceeds of DKK 7 billion in the first half of 2023 through the issuance of new shares with pre-emptive rights for GN’s shareholders (the “Rights Offering”). Proceeds from the Rights Offering will be used to strengthen GN’s balance sheet and provide appropriate financial flexibility. With these actions we are confirming our commitment to the capital structure policy with a target of 1-2x NIBD/EBITDA, which we plan to reach in the short term.”
GN has entered into a standby underwriting letter and, as such, the Rights Offering is, subject to certain customary conditions, fully underwritten by a syndicate of banks. In connection with the Annual General Meeting on March 15, 2023, GN’s Board of Directors plan to seek authorization to increase the share capital with pre-emptive rights for the existing shareholders.
Financial highlights Q4 2022
- GN Store Nord delivered revenue of DKK 5.3 billion in Q4 2022 and an organic revenue growth of 3%. Adj. EBITA was DKK 744 million, equal to a growth of 14% compared to Q4 2021
- GN Hearing delivered a very strong 14% organic revenue growth in Q4 2022 driven by significant market share gains as a result of the successful ReSound OMNIA launch. Adj. EBITA was DKK 503 million in the core business, equal to an EBITA margin of 28.9%, reflecting strong operating leverage. The Emerging business delivered an EBITA of DKK -31 million
- GN Audio delivered -3% organic revenue growth in Q4 2022 driven by 9% organic revenue growth in Enterprise but offset by -38% organic revenue growth in Consumer. SteelSeries delivered a strong finish to the year leading to an organic growth of -4% in Q4 2022 in a soft market. Adj. EBITA ended at DKK 334 million in Q4 2022
Financial guidance for 2023
GN Hearing
In 2023, GN Hearing expects to continue to grow faster than the projected market growth. Due to the current macroeconomic environment, GN Hearing is projecting 1-3% market volume growth and -1% to -2% market ASP decline. It is currently expected that market growth will be higher in H2 2023 compared to H1 2023. Due to GN Hearing’s current momentum and competitive product portfolio, an organic revenue growth between 2% to 8% driven by market share gains is expected for 2023.
Non-recurring items primarily relates to investments in the supply chain in the magnitude of DKK ~ -150 million is expected in 2023 in order to restore profitability. For the core hearing aid business, the EBITA margin is expected to be between 13% to 16% for 2023 excluding non-recurring items. In the Emerging Business (including JabraEnhance.com (formerly Lively) and further investments into the digital space), GN Hearing will continue to invest, and with the expected strong topline growth, the EBITA impact for 2023 is expected to be DKK ~ -150 million.
“We are very pleased with delivering 14% organic growth in Q4 and taking share in soft hearing aid markets. Our new flagship platform ReSound OMNIA has exceeded our high expectations and we are thrilled that customer reception and initial sales numbers have been very strong. GN Hearing’s new ReSound OMNIA product family is available in a full line-up of popular styles to cater to all hearing needs and preferences. In addition to the Receiver-in-Ear hardware launched in August 2022, the family now includes miniRIE, Behind-the-Ear (BTE) and custom-made styles all benefiting from 150% improvement in hearing in noisy environments, which puts us in a very strong competitive position going into 2023.”
–Gitte Aabo, CEO of GN Hearing
The GN Hearing financial guidance is based on the following assumptions for Q1 2023:
- Revenue: Q1 2023 organic revenue growth is assumed to be within the 2-8% guidance
- EBITA: Q1 2023 EBITA margin assumed to be mid-single digit (excluding non-recurring items) due to seasonality and launch costs. The EBITA margin is expected to improve in H2 2023 due to operating leverage
GN Audio
In 2023, GN Audio expects to continue to grow faster than the market. The uncertainties arising from the current macroeconomic environment are expected to negatively impact the market growth. GN Audio is expecting organic revenue growth between -10% to +5%. The EBITA margin is expected to be 10% to 15% for 2023 excluding non-recurring items. This reflects an expectation of gaining market share in a challenging market environment and continued cost prudence.
In order to further reduce the cost base GN Audio is expecting non-recurring items of DKK ~ -150 million in 2023 in relation to cost reduction measures.
“I’m very pleased to take over from René Svendsen-Tune after his successful 8 years. GN Audio is innovative, well run, and I am confident in our team’s ability to execute strongly. In 2023, we will continue to launch new industry leading products, making us strongly positioned to continue to delight customers and gain market share in a difficult environment.”
–Peter Karlstromer, CEO of GN Audio
The GN Audio financial guidance is based on the following assumptions for Q1 2023:
- Revenue: Q1 2023 organic revenue growth is assumed to be negative, due to challenged market conditions
- EBITA: Q1 2023 EBITA margin assumed to be mid-single digit (excluding non-recurring items) due to the topline development and investment in growth opportunities. The EBITA margin is expected to improve in H2 2023 due to improvement in operating leverage
GN Store Nord
For full year 2023, GN Store Nord consequently expects organic revenue growth of -6% to +6% in 2023, while EBITA in “Other” is expected to be DKK ~ -200 million.
“2022 was a challenging year with significant external headwinds. Still, GN took market shares across business segments and delivered revenue of DKK 18.7 billion and adj. EBITA of DKK 2.2 billion.”
–Peter la Cour Gormsen, CFO of GN Store Nord
For further details, visit GN’s website.
**Readers can download GN’s 2022 Annual Report here.
Source: GN
