GN ReSound generated 4% organic growth and thereby gained market share for the eighth consecutive quarter. Business fundamentals continue to improve and EBITA increased by 47% compared to Q2 2011 (excluding SMART restructuring costs). Late September, GN ReSound will launch a premium product family with breakthrough technology, including ear-to-ear connectivity and direct 2.4 GHz sound streaming. Based on the upcoming launch and the consistent market appreciation of ReSound Alera(TM), the higher end of the organic growth guidance for 2012 of "3 - 5%" is now considered most likely. In light of the current elevated macroeconomic uncertainty, the revenue guidance is unchanged. The GN ReSound EBITA guidance is adjusted from "DKK 525 - 575 million" to "DKK 540 - 575 million" reflecting mainly a favorable foreign exchange development as well as continued business improvements.
GN Netcom delivered 6% organic growth. CC&O grew 6% which reflects strong performance in North America where organic growth was around 20% driven by Unified Communications. In southern Europe, the debt crisis led to market weakness in the traditional CC&O segment. As a result the 2012 organic growth guidance for GN Netcom is adjusted to "around 7%" from "more than 9%- previously. The EBITA guidance for 2012 of "DKK 350 - 375 million" is confirmed despite lower than projected revenue growth, reflecting the significantly increased profitability in Mobile and the overall improved and scalable business model. In Q2 2012, EBITA was DKK 87 million - an improvement of 24%.
GN Store Nord's investment in exploratory research projects as announced in the Annual Report 2011 has indicated encouraging leads beyond what has previously been observed. A number of additional projects have been initiated, and the Board of Directors now expects to invest DKK 15-25 million during 2012 against the previously expected "up to DKK 15 million-. The EBITA guidance for Other is consequently changed from "DKK (50) - (75) million" to "around DKK (75) million-.
-- GN Store Nord's revenue was DKK 1,515 million compared to DKK 1,334 million in Q2 2011 corresponding to 14% revenue growth and 5% organic growth. Compared to Q2 2011, acquired activities added around 2% to the revenue. -- Consolidated EBITA was DKK 185 million (excluding SMART restructuring costs of DKK 52 million), up 36% from DKK 136 million in Q2 2011. -- GN ReSound revenue was DKK 943 million and organic growth ended at 4%. EBITA was DKK 109 million (excluding SMART restructuring costs), up 47% from DKK 74 million in Q2 2011. -- GN Netcom revenue was DKK 572 million reflecting organic growth of 6%. EBITA was DKK 87 million, an increase of 24% compared to the same period last year. -- GN ReSound's SMART restructuring program continues to progress as planned and the DKK 190 - 240 million EBITA improvement potential in 2013 is confirmed. As previously communicated, certain non-core and loss making entities are expected to be divested during the remainder of 2012. As a result of an expected divestment in Q3 2012, "gain/loss on disposal of operations" is negatively impacted by a DKK 20 million one-off, non-cash loss in Q2 2012. The group guidance for 2012 for "amortization, finance, etc." is consequently adjusted from "around DKK (50) million" to "around DKK (75) million". -- GN Store Nord's organic revenue growth guidance for 2012 is changed from "more than 5%" to "4 - 6%". The EBITA guidance is changed from "DKK 800 - 900 million" to "DKK 815 - 875 million" reflecting foreign exchange developments, improved performance in the operating businesses and additional exploratory research projects carried out by the Strategy Committee under the Board of Directors. -- The Board of Directors has decided to initiate a new DKK 400 million share buyback program upon conclusion of the current DKK 1.3 billion program reflecting the continued improvement of business fundamentals and performance as well as GN Store Nord's capital structure policy of having net interest bearing debt of up to a maximum of two times EBITDA.
Quotes from the Executive Management:
Lars Viksmoen: "Q2 became the eighth consecutive quarter where GN ReSound gained market share and we also delivered a 47% EBITA improvement compared to the second quarter last year. The SMART program is progressing as planned and I'm pleased to confirm the earnings improvement targets as communicated earlier. I am also pleased to announce that late September 2012, GN ReSound will be launching a premium product family with breakthrough technology, including ear-to-ear connectivity and direct 2.4 GHz streaming of sound."
Mogens Elsberg: "I'm very pleased to report continued market share gains as well as an EBITA improvement of 24% compared to second quarter last year. The global demand for Unified Communications headsets continues at a high rate with notable growth in North America. For GN Netcom overall, the prospects for future growth and profitability improvements remain very encouraging despite turmoil in southern Europe due to the ongoing debt crisis."
For further information, please contact:
Mikkel Danvold VP, IR & Communications
GN Store Nord A/S Tel: +45 45 75 02 71