Innovation inspired by future scenarios, collaboration and metrics.
Innovation inspired by people - GN Group
Transcript of Innovation inspired by people - GN Group
2
Safe Harbor Statement
The forward-looking statements in this report reflect the management's current expectations of certain future events and
financial results. Statements regarding the future are, naturally, subject to risks and uncertainties, which may result in
considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions
regarding future events, which may prove incorrect.
Factors that may cause actual results to deviate materially from expectations include – but are not limited to – general
economic developments and developments in the financial markets, technological developments, changes and
amendments to legislation and regulations governing GN’s markets, changes in the demand for GN's products,
competition, fluctuations in sub-contractor supplies and developments in ongoing litigation (including but not limited to class
action and patent infringement litigation in the United States).
This presentation should not be considered an offer to sell or buy securities in GN Store Nord.
GN’s investment case
Clear strategy underpinned by deep technology expertise and
strategic global partnerships
Strong cash conversion and asset light business model
Focused growth model, dedicated developer, manufacturer and
distributor, refraining from vertical integration
Profitability in line with or better than peers
Focused innovation within sound and video processing in selected market
segments
Leading positions in attractive markets with high entry barriers
4
Revenue & organic growth
(DKK million & %)GN Hearing GN Audio
GN at a glance
Global leader in intelligent audio solutions Global reach, local presence
• Founded in 1869 and listed on Nasdaq Copenhagen
• Technology-driven company primarily developing and manufacturing
hearing aids (GN Hearing) and headsets, speakers and video (GN Audio)
• Innovation leader with expertise in the human ear, sound and wireless
technology under one roof
• Unique portfolio of medical, professional and consumer audio solutions and
deep R&D expertise (total R&D spend of DKK 1.4 billion per year)
• Strong track record of strategic partnerships with leading channels,
customers and adjacent industry technology leaders
• Access to attractive and growing gaming gear market through the
acquisition of SteelSeries
Financial summaryBusiness areas and brands
EBITA & EBITA margin
(DKK million & %)
Countries with GN offices
Countries with GN distributors
FCF & cash conversion*
(DKK million & %)
*FCF: Free cash-flow excluding M&A, cash conversion: FCF / EBITA
10,607
12,57413,449
15,775
2021
13%
20%
2018
15%
2019
9%
2020
1,956
2,321
1,866
2,619
2020
18.4%
2018
16.6%
2021
18.5%
2019
13.9%
1,110
1,296
1,865
-100
-50
0
50
100
150
200
57%
20192018 2021
56%
27%
2020
100%
702
5
GN builds on innovation and ecosystem leadership
6
20031st to introduce an
open mini BTE
20141st Made-for-
iPhone
hearing aids
20121st to introduce
2.4 GHz e2e
technology
20201st to introduce All
Access Directionality
& M&RIE
20081st to introduce
Asymmetric
directionality
Definitions: DSP: Digital Signal Processing; e2e: Ear to Ear
20001st Bluetooth®
headset
20041st digital amplifier
with DSP
20141st wireless earbuds
with built-in heart rate
monitor
20131st BT Stereo
headphones with
Dolby
1st smart panoramic -
4k-pixel plug-and-play
video solution
20111st Bluetooth
headset with ANC
1st all-in-one
hearable,
Jabra Enhance Plus
In 2021 the R&D spend was DKK 1.4 bn, corresponding to an R&D to revenue ratio of 9%
20181st company to introduce direct
streaming from Android devices
using Bluetooth Low Energy
2015Smart Hearing
Alliance with
Cochlear
20171st headset officially meeting
Open Office Microsoft
Skype for Business
requirements
2.4 GHz
GN’s engineering capabilities in hardware and software for audio and video deliver unique and individualzied customer experiences.
To enhance our impact, we partner with leading channels, ecosystems, scientists, and other industry leaders to leverage technology
and market acess
8
GN Hearing at a glance
Brands, products and partnerships
Financial Performance
Revenue & organic growth
(DKK million & %)
EBITA & EBITA margin
(DKK million & %)
FCF & cash conversion1
(DKK million & %)
Note 1: FCF: Free cash-flow excluding M&A, cash conversion: FCF / EBITA
Strategic Focus
Individualized customer experience: We will obsess about
customer experience for users of hearing aids and business support
for hearing care professionals
Innovation leadership: We will continue to lead in innovation – in
individualized hearing experience, in overall user experience, in
connectivity, and in customer care
Commercial & ecosystem excellence: We will build more and
stronger relationships with hearing care professionals and
ecosystem partners
5,8336,351
4,7255,332
7%
2020
-24%
7%
20192018 2021
16%
1,1941,284
41
643
2018 2020
21%
1%
20%
2019 2021
12%
574
672
127
198
310%
48%
20192018 2020
52%
2021
31%
Living with untreated hearing loss increases the risk of health problems
9
• The incidence of dementia is greater in people with hearing loss1, and early studies show that wearing hearing aids may have a postive effect on cognitive function2
• People with mild hearing loss were nearly three times more likely to have a history of falling than those with no hearing loss3. One study shows that wearing hearing aids may improve balance4
• Wearing hearing aids reduce the risk of depression5
• Untreated hearing loss reduces quality of life6
References: 1 Lin FR, Metter EJ, O'Brien RJ, Resnick SM, Zonderman A, Ferrucci L. Hearing loss and incident dementia. Arch Neurol. 2011 Feb;68(2):214-202 Lancet Commission on Dementia Prevention: Intervention and Care Reference, August 2019 3 Lin F. & Ferrucci, L. (2012) Hearing Loss and Falls Among Older People in the United States. Arch Intern Med. 2012;172(4):369-3714 Hullar, T: The effect of hearing aids on postural stability. Laryngoscope, 2014.5 Hearing Industries Association: MT10:MarkeTrak, March 27, 20196 Kochkin, S. MarkeTrak VIII: Patients report improved quality of life with hearing aid usage, Hearing Journal, Vol. 64 (6), June 2011.
0301
02 04
10
Multiple attractive megatrends driving market growth~4-6% expected unit CAGR in coming years1
Room for penetration growth High barriers to entry to the market
Penetration still low,
especially for less
severe hearing loss
• 65+ population expected to grow significantly in the years to come
• Baby boomers generation reaching retirement age
• Increasing noise pollution drives prevalence of hearing loss
• Increasing wealth among larger middle class
1) ASP decline of 1-2%. Based on company estimates, industry association EHIMA 2) World bank
Profound
Severe
Moderately severe
Moderate
Mild
Source: MarkeTrak, EuroTrak, GN estimates
Global hearing aids market growth1
(unit growth)
GDP growth (annual %)2 0% GDP growth
The hearing aid market remains very attractive and robust in the mid to long term
’02 ’08’05’03 ’07’04 ’06 ’09 ’17’10 ’11 ’12 ’13 ’14 ’15 ’16 ’18 ’19 ’20 ’21 ’22E
~4-6%
Degree of penetration
• Users of hearing aids tend to
choose hearing aids based
on inputs from their hearing
care professional
• Sticky distribution as hearing
care professionals tend to
partner with same
manufactures
• 75+ years of knowhow in the
hearing aid space
• Significant investments
required into R&D
• Extensive intellectual
property rights in the hearing
aid space
• FDA regulations (Medical
Class II devices)
• Increasing requirements
from the EU Medical Device
Regulation
• Extensive investments
needed into quality
management systems
DistributionTechnologyRegulations
Key trends and drivers
impacting
GN Hearing’s business
Over the past few years, we have seen an acceleration of existing
trends as well as an emergence of new ones. The trends GN Hearing
continue to benefit from are:
11
GN Hearing strategy update
Individualized
customer experience
Innovation leadership
Commercial &
ecosystem excellence
To realize our ambition, GN Hearing will continue building on the strong existing foundation of
the business and retain the three strategic pillars laid out in the ‘2020 and beyond’ strategy:
Digitalization and data
Regulatory shifts
expanding the market
Changing competitive
landscape
ConsumerizationAging populations with
low adoption rates
Sustainability drives design
and manufacturing decisons
Digitize and simplify the way we work
Core business
12
GN Hearing strategy update
➢ Modernize hearing care by building new ways of connecting hearing care professionals, consumers and partners
➢ Digitize, simplify and automate the supply chain
➢ Simplify the way we work and reduce complexity
➢ Accelerate through M&A and partnerships
• Participate in new channels and hearing solution adjacencies
• Build on the combined competencies of GN to reach new customer groups
with lifestyle hearing products including Jabra Enhance Plus
• Deliver customer-centric products and experiences with organic
hearing including multiple new product launches in 2022
• Be a trusted and innovative partner for our hearing care
professionals in key markets
Emerging business
Simplify to growUnlocking the potential of the hearing solutions market
Current focus areas
Making hearing sound natural, feel natural and enabling people to connect naturally
again through Organic Hearing
ReSound ONE
Advanced
Essential
Premium
ReSound LiNX Quattro ReSound ENZO Q ReSound Key
ReSound
SmartFit
ReSound
Assist
ReSound
Assist Live
ReSound Smart 3D
iOS and AndroidTM
5 models
10 models 2 models
10 models
Announced August 2018 Announced February 2020RIEs announced August 2020, BTEs announced February 2022 Announced February 2021
Wireless
Accessories
13
Worldwide: 80% of people with a hearing loss currently live without hearing aids
14
Do not want a traditional hearing aid
Interested in tech but want an
easy solution
Source: MarkeTrak, EuroTrak, GN estimates
Recognized hearing difficulty
Want a consumerized
approach
All in One
Penetrated20%
Not penetrated80%
Penetration of hearing aids What are the 80% non-users looking for?
• Lifestyle consumer proposition
• All-in-one solution; hearing enhancement, great call and music quality
• Small, discreet and stylish design – 50% smaller than Jabra Elite 75t
• 10 hours battery life on a single charge and 30 hours included
with charging case
• Available exclusively through licensed HCP’s
Building on years of research, innovation and
engineering GN introduces Jabra Enhance Plus
15
Lively 2021 financial highlights
The acquisition of Lively - new business opportunities emerging
16
Lively - a leader in online hearing care
• Leader in online hearing care and digital marketing platform,
enabling consumers to receive hearing care from licensed hearing
care professionals in the U.S. all from the comfort of their home
• Online market is estimated to account for ~4% of the U.S.
hearing care market and is expected to continue to grow at a
much faster pace than other segments
• Customers are almost ten years younger than users seen in
hearing care clinics providing the opportunity to expand the market
• Significant lead generation opportunity for GN’s Beltone and
ReSound partners as the unserved two-thirds of Lively’s consumer
inquiries now can be helped
EBITA (DKK)
-171m
Revenue (DKK)
114m+143% organic growth
16
17
The most focused hearing instruments manufacturer in the world
Cochlear implants
Hearing instruments
(Retail)
Bone anchored hearing systems
Hearing diagnostics
Hearing instruments
(Wholesale)
Size (market value)
5% Profitability 30%
0%
G
row
th 1
5%
• Five main manufacturers
of hearing instruments
• Competing for market
access
Profit pool (margin)
(20-25%)
• Consolidated market
with two main
component suppliers
(Sonion and Knowles)
Profit pool (margin)
(20-30%)
• Top buying groups
include Audigy, Elite,
and AHAA
• Many distributors across
the world – highly
fragmented
Profit pool (margin)
(10-15%)
• Traditional hearing
instrument dispensers,
ENTs and online
retailers
• Largest retail player is
Amplifon, but
manufacturers are
catching-up
Profit pool (margin)
(5-15%)
USD
~5bn
Focus on core capabilities within hearing instruments… …and strategic partnerships in the distribution channel
Wholesale
hearing instruments
USD
~5bn
Component
manufacturersManufacturers
Distributors /
buying groups Retailers
• Maintain high margins
• Ensure channel access
Competitors
• Retail networks add complexity, limits agility and are investment/cost heavy
• Verticals (Implants) divert attention (few synergies)
GN refrains from
vertical integration
18
GN uniquely positioned for future growth with its distribution approach
Focus on
independent retail
markets
▪ +85% of the global market is not locked by hearing aid manufacturers
▪ GN has significant room to grow its global market share
Note: Selected countries with indication of unit share of market not locked by manufacturers (GN Hearing estimates)
The vast majority of the retail market is not locked by manufacturers
65-75% >75%
Innovation
excellenceStrategic
partnerships
Efficient use
of capital
Focus on
core
competencies
No
competition
with
customers
Strategic
agility
Driving growth through strategic collaboration
Partnering up with
tech giants
Exposure to fast-growing
cochlear market
19
Refraining from
vertical integration
21
GN Audio at a glance
Brands and products
Revenue & organic growth
(DKK million & %)
Adj. EBITA & Adj. EBITA Margin
(DKK million & %)
FCF & cash conversion1
(DKK million & %)
Strategic Focus
Individualized customer experience: We will offer customers
best-in-class experiences as we transform from strict product focus
to a more segment- and experience driven approach
Ecosystem-led innovation: We will lead in innovation and develop
world-class and highly relevant audio and video products and
solutions together with leading ecosystem partners
Sustainable commercial & operational excellence: We will excel
in go-to-market execution in enterprise, retail and online channels
and support our high growth with agile, sustainable and scalable
operations
4,774
6,223
8,724
10,443
26%21%
2018 2019 2020
42%
22%
2021
905
1,244
1,888
2,209
2018
20%19%
20202019
22%
2021
21%
798 849
1,729
1,288
86%
20202018
88%
2019
71%
2021
60%
Note 1: FCF: Free cash-flow excluding M&A, cash conversion: FCF / EBITA
Financial Performance
22
Strong demand and estimated market growth across business segments
Target users Market characteristics Market share Market size (USD) Market growth
OfficeOffice-based
knowledge workers
From desk-phone telephony in private
offices to UC&C in open offices
~2.1bn ~10%
Contact center “Calls for a living“From desk-phones using on-premise
infrastructure to laptop-based cloud calling
Collaboration Plug-and-play collaborationFrom built-in legacy equipment to UC&C-
enabled plug-and-play solutions ~2.5bn ~20%
ConsumerPreference for great calls,
music and an active lifestyle
From corded headbands to True Wireless
as the preferred form factor ~24bn ~10%
GamingPremium software-enabled
gaming gear
Growing base of gamers and low
penetration of purpose-built gaming gear ~5.5bn ~7-8%
Hearing protectionTactical hearing protection for
defense and security
Hearing protection systems is a growing
political need ~0.6bn ~10%
Sources: MarkeTrak, EuroTrak, GN estimates, NewZoo, The NPD Group Inc.
23
Professional headset market accelerated during the pandemic and is set to
continue to grow
0301
02 04
• Exclusive distribution
through distributors and
resellers
• Broad and deep product
portfolios required
• Long term relationship drives
future growth
• Product complexity, open-
offices, and increasing
background noise require
superior technology
• Advances in technology, incl.
AI to support the
improvement of efficiency for
customers
Underlying UC&C adoption trend further accelerated by COVID-19Professional headset market is set to continue to grow
Driven by increased penetration and new segments Increasing entry barriers to the market
• Extensive collaboration and
integration with software
vendors
• Certification process through
software vendors requires
extensive investments
DistributionTechnologyIntegration• Monthly active users of Remote
Conferencing Apps has grown
triple-digit during the pandemic
• New inflows from other verticals
have emerged– e.g., in public
sectors which could expand the
market significantly
• Relevant target groups within
government, education and
healthcare workers could add
>400 million potential users
worldwide
Note: Company estimates, Frost & Sullivan
2014 2019 2021E 2025E
~USD 2.1bnCAGR: ~7%
CAGR: ~25%
CAGR: ~10%
0
100
200
300
400
500
600
700
20%
0%
10%
50%
30%
40%
2018 2021E 2025E
Penetration rate
Office workers (millions)
~17%
~550
Office
Contact Center
• Convergence to cloud-based solutions as the work from “anywhere” phenomena accelerated
• Flexible working adopted during COVID-19 is likely to continue as the world returns to more
normal conditions
• With the rise of hybrid work, multiple endpoints, including more than one headset, are expected to
be purchased for some users, which could underestimate market potential
• More frequent use of equipment is likely to increase replacement rates
• Corporates seeking to reduce travel costs and carbon footprint; whilst improving productivity and
efficiency
24
UC platform growth has significantly outpaced the professional headset market
“Teams usage has never been higher. We have nearly 250
million monthly active users as people use Teams each day to
communicate, collaborate, and co-author content across work,
life, and learning”
- Satya Nadella, Chairman and CEO of Microsoft. July 27, 2021
6x Up ~6x in daily
active users
30x Up ~30x in daily
active participants
“In a recent survey we conducted, 80% of US respondents
agreed that all interactions will continue to have a virtual
element post-pandemic, and that figure was even higher in
many of the other markets we surveyed”
- Eric Yuan, President and CEO of Zoom. June 1, 2021
Unified communication platforms have experienced massive growth* Professional headset market accelerated during the pandemic
Office workers
~550 million
Government
workers~150 million
Established segment
New opportunities: Public sector
With ~17% penetration
Low penetration
* In 2020 accelerated by COVID-19
Source: Public Information, Frost & Sullivan and GN estimates
Education and
healthcare personas~260 million
Low penetration
25
GN Audio strategy update
UC moves beyond office
Gaming goes mainstream
Products and channels
become more consumerized
Audio, video and data
replaces audio-only
Work-life becomes hybrid
Sustainability drives design
and manufacturing decisons
Key trends and drivers
impacting GN Audio’s business
Over the past few years, we have seen an acceleration of existing
trends as well as an emergence of new ones. The trends GN Audio
continue to benefit from are:
Individualized
customer experience
Ecosystem led innovation
Sustainable commercial &
operational excellence
To realize our ambition, GN Audio will continue building on the strong existing foundation of
the business and retain the three strategic pillars laid out in the ‘2020 and beyond’ strategy:
GN Audio strategy update
Simplify to grow
Industry solutions*
Enable through M&A
*) Targeting more than two billion "deskless workers" (teachers, doctors, retail staff, logistics personnel, first responders, and many other key roles)
ConsumerContact center
Take share in maturing market;
Explore adjacent opportunities Win high-growth markets
Office Collaboration Gaming
Simplify the way we work
➢ Transforming from an audio-only business to an audio, video, and gaming business
➢ Prioritize resources in Office, Collaboration, and Gaming while taking share in Consumer and Contact Center
➢ Broaden the scope of the Office business unit beyond office headsets
➢ Accelerate through M&A and drive simpler ways of working
Continue to take market share
by expanding propositions and
delivering innovative products
to every professional
Scale existing business and
continue portfolio expansionLead the market for premium
and software-led gaming
peripherals
Convert installed base and
gain market share with
digital solutions
Continue growth of the true
wireless portfolio
Expand propositions
towards non-office workers
Current focus areas
26
27
New ways of working calls for superior technology
In the office Jabra Evolve2 85
• Background noise
• Different UC platforms
• Interruptions
• Need for collaboration
• Busy environment
Working from home
“On the go”
• Plug into a new set-up
• Background noise from kids,
dog, etc.
• Limited privacy
• Concentration issues
• More than one device Intelligent 10-microphone
technology and new improved signal
processing algorithms delivering
outstanding call performance,
everywhere
Bigger speakers: Powerful leak-
tolerant 40mm. Factor in advanced
digital chipset and the latest AAC
codec driving superior sound quality
for both calls and music
Busylight visible from any direction.
Red light automatically activated
when in call or in a meeting
Discrete hidden boom arm:
Retractable boom arm allows for a
more casual look without
compromising on call quality
Noise isolating design and ANC:
Enhanced noise isolating design and
powerful digital hybrid ANC
Soft memory headband: New ergonomic
headband designed from hundred of head
scans, for comfortable all-day wear
Superior
battery: Up to
37 hours
battery life - 8
hours of
battery life
charged in 15
minutes
• No charging options
• Background noise
• Changing environments
• Move from office to “on the go”
• Preference for music listening
and smarter design
Use case:
Use case:
Use case:
Panacast 50
Panacast 20
• The world’s first new-normal-ready intelligent video bar
• Three 13-megapixel cameras mounted in a high-precision multi-camera
array creating an immersive 180° field of view covering the full room
• Architecture enables the intelligent video bar to carry out real-time
integration of audio, video and data allowing for Intelligent Zoom feature
• Safety Capacity, Room Usage and People Count generating anonymous
room occupancy data
• Plug-and-play solution with an advanced security layer integrating up
against all leading UC vendors
28
Intelligent camera line up for insight driven collaboration in the hybrid working spaceIntroducing Jabra PanaCast 50 & 20
• Jabra’s first intelligent personal camera
• 4K Ultra HD Video as well as personalized Intelligent Zoom and
automatic lighting correction
• Built-in presentation features like the new Picture-in-Picture mode
• All the experiences are powered on the device itself, significantly
minimizing the risk of security breaches,
maximizing speed, accuracy, and quality
Acquisition of SteelSeries: An Ideal strategic fit
29
Global pioneer in
premium gaming gear
• Software enabled
• Superior quality
• Innovative design
• Strong brand
Significant scale
opportunities• Leveraging industry leading
capabilities of GN Audio
Access to new
attractive market
• New GN growth engine
30
SteelSeries continued their growth journey in 2021Transaction closed January 12, 2022
SteelSeries 2021 performance Synergies and costs
(Revenue, DKK million)
Growth engine and Integration Strategy
• SteelSeries added as a new growth engine to GN and will function as a business unit within GN Audio. Integration will focus on supply chain
Synergies
• Annual run-rate operational synergies of DKK ~150 million expected by end of 2022
Transaction costs
• Estimated to DKK ~ -150 million (with DKK -45 million already booked in 2021)
Integration costs
• Estimated to DKK ~ -100 million
Accounting impact
• PPA effect of DKK ~ -200 million in COGS primarily in Q1 2022, as well as yearly step-up amortizations of DKK ~ -250 million
731
970
1,244
2,020
2,697
0
1,000
2,000
3,000
2017 2018 2019 2020 2021
... and with an adj. EBITA margin of 13.6% in 2021
Evolve2 40 & PanaCast 20 Speak 710Evolve2 75 Evolve2 85 Elite 7 Pro Evolve 75e
Broad product portfolio, two-tier distribution model and long-term relationships
driving commercial excellence
Road warriorExecutive nomadFlexible hub workerRemote workerCorridor warriorDesk worker
HIGH MOBILITYLOW MOBILITY
Meeting room
PanaCast 3 & PanaCast 50
Broad and deep product portfolio required
31
Go-to-market strategy drives the commercial execution
Enterprise high-touch sales
Medium/ large enterprise
Small/ medium enterprise
GN Audio sales organization
Distribution sales
Distributors
B2B channel sales
Reseller
Reseller
Reseller
32
Driving scalability with very efficient outsourced supply chain setup
Outsourced but fully controlled process with GN driving sourcing
Component
suppliersRegional
distribution
centers
R&D and
product
development
In-house process
Contract
manufacturers
Dual sourcing strategy
throughout value chainScalability and agility
Unmatched distribution
networkKey strengths
North America
distributors and
customers
Europe
distributors and
customers
Rest of World
distributors and
customers
GN - 10 years of relentless growth...
5.86.2
6.8
7.88.7
9.6
10.6
12.613.4
15.8
’12 ’13 ’19’14 ’16’15 ’18’17 ’20 ’21
CAGR: 12%
0.8
1.21.3
1.4
1.61.7
2.0
2.4
1.8
2.7
’14’12 ’13 ’15 ’17’16 ’18 ’19 ’20 ’21
CAGR: 14%
2.6
4.75.3
5.8
7.98.9
10.2
13.2
10.5
15.3
’18’14’12 ’19’16’13 ’15 ’17 ’20 ’21
CAGR: 22%
Revenue development (DKKbn) EBITA* development (DKKbn) Adj. EPS development (DKK)
* Excluding one-offs
R&D
~25%
M&A
~15%
35
Strict focus on capital allocation
• Organic Investments
• Synergistic M&A
• Annual Dividend
• Share Buy Back
GN capital allocation over the past 3 years
Share buy back
~40%
CAPEX
~10%
Dividend
~10%
Target leverage
1-2x
Creating shareholder value through efficient capital structure
36
Shareholder distribution• GN distributed DKK 1,354 million to shareholders in
2021 before pausing the share buyback program in
October 2021 following the acquisition of SteelSeries
• GN expects its financial leverage to increase short term as
a consequence of the SteelSeries and Lively acquisitions
• Due to the expected strong cash flow generation across
the business, it is expected that GN will quickly de-
leverage
• Long term leverage target of 1-2x NIBD/EBITDA is
confirmed, with de-leverage within a couple of years
• Annual General Meeting on March 9, 2022:
• GN will propose a dividend of DKK 1.55 per share in
respect of the fiscal year 2021, total DKK 214 million
• Proposal to cancel 982,604 treasury shares
Q4
2022
NIBD/
EBITDA
Capital
structure
policy
target
Expected development of leverage ratio
Q1
202220202017 2018 2019 Q4
2021Couple of years
1.0x
2.0x
0
500
1,000
1,500
2017
1,443
2019 20202018
1,1681,392
356
2021
1,354
Share buyback Dividends
Financial guidance 2022
37
Organic revenue
growth
Adjusted
EBITA margin4)Non-recurring items
(DKK million)5)
Growth in
adjusted EPS6)
GN Hearing
- Core business organic 5 - 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%
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) GN Audio and SteelSeries organic revenue growth constrained by the current global supply chain situation
Note 4) Excluding non-recurring items
Note 5) Non-recurring items in GN Hearing primarily related to supply chain investments (DKK ~ -150m) and in GN Audio related to transaction (DKK ~ -100m) and integration costs (DKK ~ -100m) as
well as non-cash PPAs (DKK ~ -200m), associated with SteelSeries
Note 6) Compared to 2021 adjusted EPS (excluding non-recurring items and amortization and impairment of acquired intangible assets) of DKK 15.29
Based on foreign exchange rates as of February 10, 2022
Full year 2022 guidance based on a challenging Q1 2022 and an assumption of a
strong H2 2022 performance across the business
38
The GN Hearing financial guidance is based on the following assumptions:
• Revenue in core hearing aid business: Q1 2022 organic revenue growth to be low-single digit. H2 2022 organic revenue
growth to be high-single digit following key product launches with extension of the ReSound ONE platform in H1 2022 and a
new platform launch in Q3 2022
• EBITA in core hearing aid business: Q1 2022 EBITA margin to be low-single digit (excluding non-recurring items) with a
gradual improvement in the three remaining quarters towards 20% by Q4 2022
• Non-recurring items: DKK ~ -150 million in EBITA investments primarily in the supply chain
The GN Audio financial guidance is based on the following assumptions:
• Revenue: Q1 2022 organic revenue growth of ~ -25% (in GN Audio organic and SteelSeries) due to supply chain constraints.
H2 2022 to return to double-digit growth rates as the supply situation is expected to ease
• EBITA: Q1 2022 EBITA margin to be in the mid-teens (excluding non-recurring items) with a gradual improvement in the three
remaining quarters resulting in an EBITA margin of ~20% for 2022 (excluding non-recurring items)
• Non-recurring items: Transaction related costs of DKK ~ -100 million and non-cash PPAs of DKK ~ -200 million following the
SteelSeries acquisition to be booked primarily in Q1 2022. Integration costs of DKK ~ -100 million
Based on foreign exchange rates as of February 10, 2022
Ambitious mid-term targets
1) In the mid-term, GN Hearing expects the global hearing aid market to continue to grow at ~4 - 6% in units with an ASP decline of ~1 - 2% annually
2) In the mid-term, GN Audio expects its markets to continue to grow at ~10% annually
Organic revenue growth EBITA margin Growth in EPS
GN Hearing(Excl. Emerging Business)
>market growth1 >20%
GN Audio(Incl. SteelSeries)
>market growth2 >20%
GN Store Nord >10% >10%
• Moreover, GN Store Nord expects to maintain a conservative capital structure policy of net interest-bearing debt to EBITDA of 1.0 - 2.0x, where
excess liquidity will be distributed to shareholders through share buybacks and dividends
39
41
➢ Climate neutral in company activities (scope 1+2)
➢ Halve the carbon footprint of company air travel
➢ Reduce our carbon footprint in our distribution and manufacturing
➢ Report to CDP and TCFD in our 2021 Sustainability | ESG Report
2025 Sustainability Goals
➢ 50% sustainable material in new products
➢ 100% sustainable packaging (minimal plastic, small size, FSC)
➢ Use sustainable product development requirements
➢ Expand take-back schemes to relevant products and regions
➢ Give more products a second life through repair or refurb
➢ Help 10 million+ people with hearing loss to Hear More, Do More and Be More
➢ Create awareness of hearing loss and break down stigmas
➢ New health functionalities in our products
➢ Support unmet hearing health needs through donations and capacity-building
Protecting our planet Truly sustainable products
and packaging
Improving health and
wellbeing
42
GN commits to Science Based Targets initiative
GN commits to Science Based Targets initiative to limit global warming to 1.5C and being net-zero by 2050
▪ Climate goals will be independently certified to be aligned with the scientific consensus
▪ GN joins the Business Ambition for 1.5 C coalition
▪ Required additional goals will be prepared in collaboration with the Science Based Target initiative
▪ Progress will be reported in the annual reports