GN Store Nord A/S Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Pajula Bozinovic - BNP Paribas Exane - Analyst : Hi, good morning. Thank you for taking my questions. Two from my side. Just first one on the guidance, can you please help us to put into perspective, the 12% to 14% EBITDA guide? What are your assumptions back in the top end and in the lower end? And as a follow up, what do you have in the lower end in terms of tariffs competition in hearing and recovery in audio assumptions. And the second one on hearing on Resound Vivia, congrats on launching the new platform. Can you give us any details on the phasing of launch, especially in key geographies and channels? And as a follow up, if you can confirm, you're aim to launch in the via in May. Thank you very much.

Question: Pajula Bozinovic - BNP Paribas Exane - Analyst : Perfect. Thank very much.

Question: Hassan Al-Wakeel - Barclays - Analyst : Good morning. Thank you for taking my questions a couple from me. So just on tariffs, what is the timeline to shift manufacturing for both gaming and enterprise? And do you expect this to be completed this year? And how are you thinking about the potential for any European tariffs? And secondly, on margins appreciate around 100 bps of headwind from tariff and FX to the margin for '25. But the margin guidance is still softer than we thought. Can you elaborate on the margin building blocks and quantify the investment plan for 2025 and what you deem to be the drivers of any potential upside to the top of the range? Thank you.

Question: Hassan Al-Wakeel - Barclays - Analyst : Thanks a lot.

Question: Martin Parkh°i - SEB - Analyst : Yes, Martin Parkh°i from SEB, two questions both related to (inaudible) maybe Peter, you could speak a little bit to the 5.9% you're guiding for 2025. Are there any so channels or regions you believe are sticking out? And maybe you can make a specific comment on Beltone. How is that doing? Is that also growing within that range? And then secondly, on -- we found Vivia where you gave a quite impressive speech about the benefits of Vivia. And I was a little bit curious about because I've gone through the white paper and read how you tested the product up against the other AI power hearing aids is particular for them from Switzerland. And I can see that you have done it in a pretty mild noisy environment and everybody knows that their products are doing very well in a very, very noisy environment. Have you also tested it in other noisy environments than this very mild environment?

Question: Martin Parkh°i - SEB - Analyst : Thank you.

Question: Martin Bren°e - Nordea Markets - Analyst : Hi. Thank you very much for taking my questions. And Peter, I have two questions and I'll direct them over to enterprise instead for a moment. And then just the first question would be on the exit run rate in surprise. Can you maybe give a little bit of color on how that looked like? Because when we were in November, you were talking about sell out rates around minus 3% and now the quota ended around minus 2%. Does that mean that you had a quite strong December? And has that continued into the beginning of the New Year? That's the first question. Then on the second question, I'm sorry, but analysts always want more. Now we have two product launches that you need to cater. But you have also alerted earlier to a headset launch, which is the biggest category. How does the product launch roadmap look like in its price from here? That's the second question. Thank you.

Question: Martin Bren°e - Nordea Markets - Analyst : Makes a ton of sense. Just a quick follow up to your buildup comment. Should we expect enterprise to start below the guidance and then build up or do you think that you could start within your guidance range?

Question: Martin Bren°e - Nordea Markets - Analyst : Makes sense. And congrats with the quarter here.

Question: Maja Pataki - Kepler Cheuvreux - Analyst : Hi, good morning. This is Maja. And one question for hearing, one question the enterprise side, please. I'll start with hearing. With Vivia coming and you know the extension of LE, Auracast into Savi, I was wondering what of what kind of technology are you bringing to your Jabra portfolio? And if you're not bringing it now to the Jabra portfolio, when are you thinking to bring maybe Audio to the Jabra portfolio? That would be number one. And then number two on the US. I mean, the last two, three weeks were quite entertaining or adventurous with regards to different offices being shut down companies calling people back to work and stuff like that. Is there anything that you believe that you're watching and saying like, oh, we have to monitor that because there might be disruption in the market for the enterprise site?

Question: Maja Pataki - Kepler Cheuvreux - Analyst : Great. Thank you. Very much.

Question: Julien Ouaddour - Bank of America - Analyst : Hi, good morning, everyone. Thanks. Thanks for taking my questions. So I have two, the first one for enterprise. Can you let me comment about the dynamic for headsets specifically? I think you mentioned sort of your maintained market leading position, but you didn't mention share gains in this specific category. And the question here is more, we're seeing good traction at Logitech like including in headsets enterprise. So I was just wondering if you also saw that at your level. So any comment would be helpful? The second one is on hearing around recent Vivia, could you maybe come back on the technical specificities of the dedicated DNN chip? How was it designed quantified maybe, decibel gains in the most noisy environments and also how the DNN works? Is it automatic on some of the beamformer? And I mean, how can we compare it versus your PS? Thank you.

Question: Julien Ouaddour - Bank of America - Analyst : Perfect. Thanks. If I can just follow up on your last comment about, let's say, processing power, I mean, should we also think that higher processing power can be, I mean, can help just to like to use the DNN real time, like a bit like something similar to what your Swiss computers is doing? And REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 10:00AM, GN.CO - Q4 2024 GN Store Nord A/S Earnings Call that you basically took the decision of being like probably closer to what stock or demands are doing, is it like, is it the right way to look at it because the difference in processing power seems to be pretty big between the chip in like in Swisscom Services. So that's why I'm asking.

Question: Julien Ouaddour - Bank of America - Analyst : Thanks. So if I may, maybe squeezing the last one very quickly on the category. I know also like your computer is trying to push for the creation of a new category which would be more AI-driven. You took the approach like them having a dual-chip set. I mean, first of all, do you believe in the creation of that? And would you maybe push for the specification of this category to be like dual chip set, including one dedicated to AI? What's your view on that?

Question: Julien Ouaddour - Bank of America - Analyst : Perfect. Thank you very much.

Question: David Adlington - JPMorgan Chase & Co. - Analyst : Yeah, morning guys. Sent the question. Firstly, just on G&X, G&A expenses, which were quite a lot higher in the fourth quarter than I think most of us expected. Just wondering, is there anything funny going on in there and how we should be thinking about that line through this year? And then just on hearing, just wondered if you'd undertaken any destocking in hearing in the fourth quarter ahead of the new launch next?

Question: David Adlington - JPMorgan Chase & Co. - Analyst : Thank you and maybe just going back on the G&A comment, I mean, any sort of particular guidance, whether we should be up down sideways for G&A costs in 2025?

Question: David Adlington - JPMorgan Chase & Co. - Analyst : Thank you.

Question: Carsten L°ndborg Madsen - Danske Markets - Analyst : Excellent. Thank you very much. I have two questions. One on Vivia. Peter, now you're talking a lot about this algorithm you have developed. Is it possible that you can share some information about how active is it? So for example, if you take throughout the day, will it be turned on the entire day only when a noisy situation is detected or how does it actually work? It is impressive to have this in such a small hearing aid, I would say. So some color on how it's actually working would be nice. And then secondly, in relation to the OTC category, Jabra, enhance.com, call hearing, and how we want to break things down. What's your view on the OTC category these days and how big a share of the US market or the market in general has the three categories taken? And what's your position right now on Jabra enhance dotcom? Will you continue to invest in expanding that channel at the same level or how should we see it going into 2025? And the final question is, sir, when you discuss the cybersecurity investments, is that something we'll see in the P&L or is it more of a cavix and activation and balance sheet thing? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 10:00AM, GN.CO - Q4 2024 GN Store Nord A/S Earnings Call

Question: Carsten L°ndborg Madsen - Danske Markets - Analyst : Great. Thank you.

Question: Oliver Metzger - Oddo BHF - Analyst : Yeah, good morning. Thanks a lot for taking my question. The first one is on hearing and whereby in particular on the hearing aid market. So you guide for 4% to 6% unit growth, on a positive side with clearly potentially front. But if you look on 2024 the over market seem to be to show more muted development around the globe than the years before. So, can you elaborate a little bit about your view on the market? So what makes you more confident on 2025 apart from the sale of France, the French opportunity? Second question is on enterprise profitability. So in 2024 you showed a quite strong progress in a tough environment. Now, basically, eventually you expect the recovery for turnaround for 2025. What's your view? How will the recovery impact profitability? Is this an element like you just sell in the beginning of the recovery more basic devices compared to premiums that the mix deteriorate or improve? It would be great to have your thoughts or your expectations for this. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 10:00AM, GN.CO - Q4 2024 GN Store Nord A/S Earnings Call

Question: Oliver Metzger - Oddo BHF - Analyst : Yes, to a certain extent, yes. But do you see some impact on the product mix in a recovery that the recovery starts first with a more sophisticated product science or more basic, is it?

Question: Oliver Metzger - Oddo BHF - Analyst : Okay. That's very helpful. Thank you very much.

Question: Niels Granholm-Leth - Carnegie Investment Bank - Analyst : Thank you. I'll turn to directly to one of my favorite subjects when it comes to GN and that's your capitalization. And so you made massive capitalizations in quarter four, had a net positive effect of DKK335 million. So how should we think about that? Firstly, was that part of your guidance for 2024 that you would have such a positive boost from R&D capitalizations? And secondly, would that mean that we should expect higher amortizations for 2025? And then my second question on networking capital, would you expect further reductions in networking capital? Thank you.

Question: Niels Granholm-Leth - Carnegie Investment Bank - Analyst :

Question: Niels Granholm-Leth - Carnegie Investment Bank - Analyst : Thank you.

Question: Shubhangi Gupta - HSBC - Analyst : Hi, thanks for taking my question. First on the hearing business. Could you comment on the market dynamics in North America? How has the sequential growth been there in hearing? And second on tariffs. So you are assuming impact only in gaming and enterprise, but you have manufacturing sites for hearing in China as well. So does it only cater to non-North American region and that is why you don't see an impact from that? Thank you.

Question: Shubhangi Gupta - HSBC - Analyst : Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 06, 2025 / 10:00AM, GN.CO - Q4 2024 GN Store Nord A/S Earnings Call