J.P. Morgan 38th Annual Healthcare Conference, January 2020 - Gitte Aabo - CEO, GN Hearing
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J.P. Morgan 38th Annual Healthcare Conference, January 2020 Gitte Aabo - CEO, GN Hearing
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.
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Gitte Aabo – CEO of GN Hearing
• Career:
• Since 2018, board member and Chairman of the Audit Committee,
GN Store Nord
• Chief Executive Officer and President for the past 11 years at LEO Pharma,
where Gitte Aabo held various managerial positions including finance, IT and
general management for 27 years in total
• Proven track record of innovation, building and transforming a global business,
combined with a strong mindset for customer focus, innovation and growth.
Extensive experience putting digital innovation on the agenda for generating
new business opportunities
• Education: MBA from Copenhagen Business School
• Nationality: Danish
• Born: 1967
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3,500 km done – 1,300 km left...
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Living with untreated hearing loss increases the risk of health problems
• 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):214-20
2 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):369-371
4 Hullar, T: The effect of hearing aids on postural stability. Laryngoscope, 2014.
5 Hearing Industries Association: MT10:MarkeTrak, March 27, 2019
6 Kochkin, S. MarkeTrak VIII: Patients report improved quality of life with hearing aid usage, Hearing Journal, Vol. 64 (6), June 2011.
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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 (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 >900 million per
year)
• Strong track record of strategic partnerships with leading channels,
customers and adjacent industry technology leaders Countries with GN offices
Countries with GN distributors
Business areas and brands Financial summary
Revenue & organic growth EBITA & EBITA margin FCF & cash conversion*
GN Hearing GN Audio (DKK million & %) (DKK million & %) (DKK million & %)
10,607 1,956
9,585 1,744
8,651 1,583 1,179 1,134
7,755 1,383 1,110
13% 18.4% 74%
607 57%
18.3%18.2% 65%
8% 17.8%
6% 6% 44%
2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018
*FCF: Free cash-flow excluding M&A, cash conversion: FCF / EBITA
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GN Hearing: Focused innovation leader
Innovation leader Brands, products and partnerships driving profitable growth
Partner with technology leaders, e.g.
Google, Apple
Innovation leader in hearing aids based on customer
insights, unique sound processing systems and Exposure to fast-growing
implant market
leading-edge connectivity and wireless 2.4 GHz
technology
Refrain from vertical integration
Strategic focus enabling shareholder value creation Industry-leading financial performance
Revenue & organic growth EBITA & EBITA margin FCF & cash conversion*
Innovation excellence focusing on end user needs, (DKK million & %) (DKK million & %) (DKK million & %)
core technology and time to market optimization
1,153 1,194 866
5,615 5,833 1,062
Commercial excellence through expansion in the 5,156 921 704
4,526
574
open market, continuation of successful partnerships 456 75%
9% 20.5%
and engaging end users digitally 7%
20.6%20.5%
48%
20.3% 66%
6% 6% 50%
People excellence by empowering leaders to deliver
on strategy, implement GN values and develop talents 2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018
*FCF: Free cash-flow excluding M&A, cash conversion: FCF / EBITA
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Strong global hearing aid market development supported by attractive megatrends
1 3
~4-6% expected unit CAGR in coming years (1) Multiple attractive megatrends
Global hearing aids market growth*
(unit growth)
~4-6% • 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
‘01 ‘02 ‘03 04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ’13 ’14 ’15 ‘16 ‘17 ‘18
GDP growth (annual %) (2)
0% GDP growth
2 4
Room for penetration growth Increasing barriers of entry to the market
Penetration still
relatively low, Regulations Technology Distribution
especially for Profound
less severe • FDA regulations • +75 years of knowhow • Hearing aid users tend
hearing loss Severe (Medical Class II in the hearing aid to chose hearing aids
devices space based on inputs from
Moderately severe
• Increasing • Significant investments their hearing care
requirements from the required into R&D professional
Moderate • Sticky distribution as
EU Medical Device • Extensive intellectual
Regulation property rights in the hearing care
Mild professionals tend to
• Extensive investments hearing aid space
needed into quality partner with same
management systems manufactures
(1) Based on company estimates, industry association EHIMA (2) Worldbank
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GN Hearing’s journey towards more natural hearing
6th generation New chipset – brilliant sound experience: unprecedented Layers of Sound™
ReSound LiNX Quattro 2018 and world’s most advanced rechargeable solution
5th generation Unprecedented benefits across three key dimensions – Sound Quality, efficient
ReSound LiNX 3D 2017 and convenient fitting and groundbreaking remote fine-tuning
4th generation Surround Sound by ReSound upgraded with Spatial Sense, helping the user
ReSound LiNX2 2015 hear where sounds are coming from, leading to more natural sound experience
3rd generation Launch of the first Made for iPhone hearing aid
ReSound LiNX 2014
ReSound Verso 2nd generation Launch of 2.4 GHz based ear-to-ear data exchange, Binaural Directionality,
2012 enables users to decide which sound to focus on
ReSound Alera 1st generation Launch of the first 2.4 GHz wireless system
2010
9Another industry first and four new ITE models expanding
the ReSound LiNX Quattro portfolio
Only CIC in the market with direct streaming
and E2E connectivity
Brilliant sound quality with Layers of Sound
Highest input dynamic range in the industry
10ReSound LiNX Quattro: A full and fresh ecosystem
RIE 61 RIE 62 Four new custom
Lithium-ion rechargeable Non-rechargeable hearing aids
Brilliant sound experience Unrivalled full Support and The world’s most advanced
with Layers of Sound spectrum of streaming personalisation rechargeable solution
11The power of the demo:
An innovative field study offers a new perspective
723 hearing care professionals participated in the listening
experience
Compare the performance of ReSound LiNX Quattro to another
premium hearing aid chosen by the hearing care professional
4 common challenging listening scenarios
12Hearing care professionals rated the ReSound LiNX Quattro sound quality
significantly better than competitors
ReSound: 85%
Competitors: 65%
ReSound All competitors
Overall collapsed
ratings of sound
quality of ReSound
LiNX Quattro and
another hearing aid
on a scale of 1
(poor) to 10
(excellent)
1 2 3 4 5 6 7 8 9 10
Rating
n = 1,994 average ReSound = 8.14 average competitors = 7.02
13Committed to developing the best AndroidTM streaming
Q3 2018 Q3 2019 Future
ASHA Specification Release of ASHA in Further
released from Google Android 10 for Pixel 3 implementation
Q2 2019 Q4 2019
ASHA made available Samsung starting to roll out
in Android “Q” Beta* Android 10
*Android 10 was formerly called Android Q in the beta version
14We have delivered strongly… and will deliver again
2017 – 2019
”Hear more, do more,
2008 - 2009 2010 - 2013 2014 - 2016 be more”
• Innovation excellence
• Commercial excellence
“Innovation • People excellence
& Growth”
“SMART”
Operations February 5, 2020
• Annual Report for 2019
“FAST”
R&D focus
15The GN investment case – focused on innovation within sound processing, mainly
active within hearing aids and enterprise headsets and solutions
Market leading positions in attractive markets with high barriers of entry
Focused and proven growth model; dedicated wholesale
manufacturer, refraining from vertical integration
Clear strategy underpinned by deep technology expertise and
strategic global partnerships
Profitability among the best in the industries
Strong cash conversion and asset light business model
16Q&A www.gn.com
E-mail: investor@gn.com
Morten P. Toft, VP - IR & Treasury, Tel.: +45 4575 4607
17 Rune Sandager, Senior Manager - IR, Tel.: +45 4575 9257You can also read
