Gn Store Nord A/S Adr

Hello, everyone, and welcome to GN's conference call in relation to an annual report announced this morning. Participating in today's call is Group CEO Peter Karlstrammer, Group CFO Søren Gjelert, and myself, Rune Senner, Head of Investor Relations. The presentation is expected to last about 25 minutes, after which we'll turn to the Q&A session. The presentation is already uploaded on GN.com. And with that, I'm happy to hand over to Peter for some opening remarks.

Thank you, Rune, and thank you all for joining us today. In 2024, we demonstrated that we are on track to deliver on the intended results from our transformation into a simpler and more efficient one-company setup. We delivered strong, profitable growth resulting in a very healthy cash flow. We have strengthened our foundation to allow us to invest further in the business to ensure sustainable and profitable growth in order to reach our long-term targets. In 2024, we navigated in mixed market conditions resulting in different growth outcomes for our three divisions. But a broad cost focus and synergy realizations have resulted in improved margins in line with our 1GN strategy. In hearing, we continue to deliver very strong performance in a market that grew slightly below historical growth rates following a very strong market in 2023. In 2024, we managed to grow 10% organically, which was on top of the 13% organic growth we delivered in 2023. This was achieved by our highly successful Nexia hearing aid portfolio and our partner approach model. Our growth was broad-based across regions and channels. In addition, we managed to further improve margins driven by the strong execution of top line and cost control, as well as a positive influence from the 1GN transformation, while also investing in future technology leadership, which is exemplified by a recent announcement of recent Vivia, which I will get back to later. In enterprise, we have seen a stabilisation of the market throughout the year and will continue to remain optimistic about further market improvements into 2025. We have maintained our market-leading position in headsets and gained market shares in video, and even though the market didn't perform and improve at the level we anticipated in the beginning of 2024, we have managed to improve the margin profile driven by a strong pricing discipline and our 1GN transformation. In gaming, we had a very strong finish to the year and gained market share in a slightly growing gaming market. SteelSeries was back at double-digit growth in Q4, underlying a strong innovation and robustness of our business. In fact, Q4 was the strongest quarter ever for SteelSeries, even surpassing the high COVID levels. The gaming division has also benefited from the 1GN transformation, already improving the margin profile and setting the division up for further margin improvements in the years to come. We ended the year successfully concluding the wind down of the Elite and Torque product lines and can now in this division fully focus on growing our gaming business while continuing improving our profitability. On a group level, we have also taken big steps in improving the margin profile. The 1GN transformation has developed favorably during its first year. We have delivered a total company-wide synergies of around 430 million Danish kroner, slightly ahead of our original plan. During the year we have implemented changes to ensure a flexible and resilient global supply chain. We have also further integrated our research and development teams to utilize scale, talent, processes and facilities to accelerate our innovation. On the finance side, we have streamlined operations and established a shared service center in Poland. We have done this while also building a stronger culture, defining new leadership principles and significantly improving the ESG agenda, including helping more than 11 million people with hearing loss around the world and reducing our scope free carbon emissions by slightly more than 25% compared to 21%. In summary, we are very pleased with our execution and progress during the year. We have created a stronger GM and prepared for future sustainable growth in order to deliver more long-term financial targets, which were announced at our capital market days in May. With this introduction, I'm happy to hand it over to CERN for further details on the group performance for the year.

Thank you, Peter, and thank you all for joining us today. Essentially, as Peter mentioned earlier, we feel good about the progress we have made in 2024 and the financial we are delivering on our commitments. In summary, we delivered 1% organic growth for the year, supported by 10% organic growth from our hearing division and negative 3% organic growth from our enterprise division and a 7% organic growth from our gaming division and lastly a negative 31% organic growth from our consumer wind down due to the wind down. If we exclude the wind down effect, organic revenue growth for the group would have been 4%. Our improvement in gross margin, supported by the strong cost focus and company-wide synergies, led to a 79% increase in reported EBITDA, which translates into an EBITDA margin of 12%, 5.4 percentage points higher than last year. The increased profitability also influenced the free cash flow generation positively, where we ended the year with 1.1 billion DKK in free cash flow, excluding M&A, and reduced our leverage further. Moving to the financial details on slide 6. As previously noted, our three divisions executed strongly, generated a 4% organic revenue growth, excluding the wind down, and a 1% in reported organic growth. Despite the mixed development on top line across our divisions, as well as the wind down of consumer and retail disposals, the gross margin increased to 53.2% compared to 49.4% in 2023. This was driven by our strong pricing discipline, synergy realizations and positive business mix. As for the company transformation initiatives, we realized synergies of around 430 million during 2024, which was slightly ahead of the plan for the year. Reported EBITDA grew 79% equal to an EBITDA margin of 12.0% compared to a 6.6% in 2023. The strong improvement in margin reflects the gross margin improvement across our divisions, but also company-wide OPEX benefits from the 1GN transformation and less extraordinary costs. With that, let's move to slide 7 and more details on the free cash flow generation. Our solid earnings level led to a positive cash flow generation of 1.1 billion Danish kroner. The strong cash flow generation was driven by the solid operational cash flow while the impact from working capital was slightly positive. 2024 included a small tailwind from changes in the working capital, which was predominantly a result of the slightly higher payables, as the positive effect on inventories was offset by a very strong revenue finish to the year, driving up receivables. With a solid cash flow generation, we have been able to reduce our net interest-bearing debt. And with the improving margin profile, our adjusted leverage ended at 3.5 times compared to 4.5 times last year, another important step in our deleveraging plan. And with those group highlights, I'm happy to hand you over to Peter from Additional Caller on the three divisions.