GN Store Nord AS, parent company of ReSound, Beltone, and Otometrics, reported 11% revenue growth in the second quarter (Q2) of 2016, and organic growth of 9%, reportedly driven by strong performance in both its hearing instruments and headset (call-center and office or CC&O) divisions. The company reports its earnings per share (EPS) reached DKK 1.57 (US$0.24), an increase of 26% compared to Q2 2015, and the company’s free cash flow (excluding mergers and acquisitions) increased by DKK 92 million ($13.8MM), an increase of 28%.
With this latest financial report, GN confirmed its 2016 financial guidance. GN Hearing delivered 12% revenue growth. Organic growth was 9%, driven by 10% organic growth in hearing instruments.
The positive results were in line with market analysts’ consensus estimates, and come despite GN losing the Costco private label Kirkland account estimated to comprise about 5% of GN Hearing’s revenues. However, this loss in sales could be counterbalanced by new gains from its recent purchase of the Audigy Group, as well as possibly concentrating more on the higher-margin sales from independents. The company reported it will launch a ReSound-branded product in Costco called Cala that will replace ReSound Sola which was launched in the branded category in mid-2015.
“The very strong momentum in GN Hearing continued in Q2 2016,” said GN Hearing CEO Anders Hedegaard in a press statement. “In a highly competitive landscape, GN Hearing continues to gain market share. This is the result of a combination of an industry leading product portfolio and strong execution of our commercial excellence initiatives. Also, in the quarter, GN Hearing’s commitment to support independent hearing healthcare professionals was further strengthened with the acquisition of Audigy Group, the US-based provider of business and performance management solutions.”
According to the company, GN Hearing’s EBITA increased 14% and reached DKK 248 million. The EBITA margin ended at 17.4%, compared to 17.2% in Q2 2015. The result includes transaction costs of DKK 22 million (US$3.3 MM) expensed in H1 2016 relating to the Audigy Group acquisition, with the cost mainly impacting Q2 2016. With the first significant M&A transaction in recent years, GN Hearing further strengthened its market position in the United States with the acquisition of Audigy Group.
GN Audio delivered 9% organic growth driven by 15% organic growth in CC&O and with (7)% organic growth in the Mobile division.