GN Store Nord (GN) Q3 2024 earnings summary

Executive summary

• Margin expansion and record free cash flow achieved in Q3 2024, driven by transformation synergies and cost control, despite uneven divisional growth.

• Hearing division delivered double-digit organic growth and market share gains, while Enterprise faced revenue pressure in Central Europe and Gaming & Consumer was impacted by product wind-downs.

• Group EBITA rose 29% year-over-year to DKK 553 million, with margin up 3.6pp to 13.3%.

• DKK 115 million in synergies realized in Q3, with over DKK 300 million year-to-date; on track for DKK 400 million in 2024 and DKK 600 million by 2026.

• Divestment of Dansk HøreCenter finalized; wind-down of Elite and Talk product lines on track for completion by year-end.

Financial highlights

• Q3 2024 revenue was DKK 4,164 million, down 6% year-over-year; organic revenue declined 4% (flat excluding wind-down products).

• Gross margin improved to 54.8% from 50.1% in Q3 2023.

• EBITA margin rose to 13.3% (up 3.6pp year-over-year); adjusted EBITA margin 13.8%.

• Free cash flow excl. M&A reached DKK 786 million, the highest Q3 in company history.

• Adjusted leverage reduced to 3.5x from 4.9x year-over-year.

Outlook and guidance

• 2024 organic revenue growth guidance: 1–2% for the group, or 3–4% excluding consumer wind-down.

• Hearing division expected to trend toward upper half of 8–12% organic growth; Enterprise at -3%; Gaming & Consumer: -10% to -2%.

• EBITA margin guidance confirmed at 12–13%, with underlying margin about 1pp higher excluding wind-down costs.

• Free cash flow excl. M&A upgraded to above DKK 1,100 million.