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Annual Report 2023
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GN Store Nord
Annual Report 2023
Content
Introduction
2023 performance highlights 3
Letter from the Chair and CEO 4
2023 key events 5
The helicopter view
Innovation and ecosystem leadership 7
Purpose and strategic focus 8
Building the foundation for future success 12
Financials
Five year overview 16
Financial review 2023 17
Financial guidance 2024 21
ESG
ESG progress 23
Impact across our value chain 24
Double materiality assessment 25
Environment
Decarbonization 27
Responsible manufacturing 28
Product sustainability 29
Circularity 31
Sourcing 32
Social
Safeguarding human rights 34
People and culture drive performance 35
Supporting communities 37
Governance
Shareholder information 39
Risk management 41
Business ethics governance 45
Data privacy, security, and ethics 46
Corporate governance 47
Board of Directors 50
Executive Leadership Team 52
Consolidated ESG data
ESG accounting processes 54
ESG data – climate related 55
ESG data – other 57
Stakeholder engagement 59
Policy overview and governance 60
EU Taxonomy Regulation disclosure 61
TCFD index 64
Additional financial information 2023
(unaudited)
Q4 financial highlights 66
Quarterly financial highlights 68
Quarterly reporting by segment 69
Regional growth composition 71
Q4 segment disclosures 72
Consolidated Financial statements
Income statement 74
Statement of comprehensive income 74
Balance sheet at December 31 75
Statement of cash flow 76
Statement of equity 77
Consolidated notes 78
Parent company Financial statements
Statements 134
Parent Company notes 138
Statements
Statements by the Executive Management
and the Board of Directors 150
Independent Auditor’s Reports 151
Independent limited assurance report on
selected ESG data 155
Table of contents
Management’s report
Statements
Purpose
and
strategic
focus
Page 8
Building the
foundation
for future
success
Page 12
Financial
review
2023
Page 17
Other 2023 reports
www.gn.com/remuneration2023
www.gn.com/corporategovernance2023
Reporting framework
Our annual reporting suite comprises this integrated Annual Report on GN Store Nord’s financial, environmental, social
,
and governance performance, our
Remuneration Report, and our Corporate Governance Report. Our reporting is prepared in accordance with International Financial Reporting Standards as
adopted by the EU and further requirements in the Danish Financial Statem
ents Act, and constitutes GN’s reporting according to Section 99a, 99b, 99d,
and 107d in the Danish Financial Statements Act as well as the Communication on Progress to the UN Global Compact.
GN Store Nord A/S
Lautrupbjerg 7
2750 Ballerup
Denmark
+45 45 75 00 00
info@gn.com
www.gn.com
Co.reg. no 24257843
In this Annual Report 2023, the financial reporting relates to
GN's 2023 organization in GN Store Nord, GN Hearing and GN
Audio. As communicated in September, 2023, the decision to
transform into a one-company setup is expected to change the
organizational setup and, consequently, the reporting structure.
GN's expected new organization is described on pages 8-13.
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2023 performance highlights
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Revenue (DKK)
-1% organic revenue growth
18.1 bn
Adj. EBITA (DKK)
9.9% adj. EBITA margin
1.8 bn
reduction in net interest-bearing debt
(DKK)
vs 2022
4 bn
Free cash flow excl. M&A (DKK)
1.1 bn
reduction in scope 3 carbon emissions
vs 2022
24%
reduction in scope 1 and 2 carbon emissions
vs 2022
34%
AGM-elected women on GN’s Board
50%
women in GN’s senior management
22%
people with hearing loss helped
vs 9.8 million in 2022
10.5 m
ESG ratings
MSCI
AA
Sustainalytics
12.3
(low risk)
CDP
B
Guidance 2024
See more details on performance
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Building leading market positions via
innovation, scale, and customer focus
Strong business execution in diverse market conditions
In 2023, GN executed well and delivered strong results in markets that
presented a mix of tailwinds and headwinds.
ReSound OMNIA drove market share gains and our hearing business
delivered 13% organic growth in a hearing aid market which returned
to pre-COVID growth rates. The enterprise market was negatively im-
pacted by macro economic headwinds and buyer hesitancy, however,
with promising stabilization in the latter part of the year. In the enter-
prise category, we successfully defended Jabra’s market leadership
through focused execution. Consumer markets stabilized throughout
2023 and SteelSeries, in particular, took significant market share, deliv-
ering 16% organic growth.
All our businesses updated their portfolios with very strong product
launches which were well received by customers and demonstrated
GN’s continued innovation leadership.
New capital plan provides solid foundation for strategy execution
We have during 2023 reduced our debt by DKK 4 billion through sub-
stantial positive cash flow excl. M&A of DKK 1.1 billion which - com-
bined with a successful equity raise, a competitive debt refinancing,
and attractive disposal of selected assets - extended the maturity of re-
maining material debt to Q3 2026.
We are confident that these actions place the company in the best po-
sition to continue and further develop our innovation strategy built on
155 years of technology-driven enhancement of vital human senses
with the company’s overarching purpose of Bringing People Closer.
Transforming GN into a fully integrated innovation powerhouse
In our Annual Report for 2022 we described our strategy to increase
the sharing of technologies between our different R&D organizations
and drive synergies between our go-to-market models to realize the
benefits of an integrated GN Group.
As a natural continuation, in September 2023 we announced the next
step in transforming GN’s businesses into a one-company setup and
simplifying the Group’s governance structure.
Our business activities are now being organized in three focused divi-
sions with accountability for customer and business success: Hearing,
Enterprise, and Gaming & Consumer. These divisions are supported by
strong functions to drive scale across the company: R&D, Operations,
Finance, People & Culture, IT, and Strategy & Transformation. The
leaders of these divisions and functions of scale together with the CEO
and the CFO constitute GN’s new Executive Leadership Team.
Entering 2024, the fundamental design of our new organization is
largely concluded and we have now moved into the execution of new
ways of working, aiming to deliver both financial benefits and multiple
advantages to customers, partners, employees, and shareholders.
As part of the one-company transformation, we identified company-
wide synergies which will support and accelerate margin improvement
across the Group. DKK ~600 million in cost synergies will be realized by
2026 of which approximately two-thirds will be achieved in 2024.
Capturing the full potential of working as one fully integrated com-
pany will over time include accelerating our innovation output, har-
vesting scale benefits, becoming a best-place-to-work company, and
delivering attractive value creation above peers.
This more streamlined and customer-focused organizational setup will
enable GN in years ahead to further expand our competitive positions
in attractive markets, returning to growth and increasing margins.
Thanks to all employees
2023 was a challenging year as GN leaders and employees were asked
to drive a fundamental transformation of the company while never los-
ing sight of our primary goal: to serve our customers well at all times.
The organization demonstrated great resilience and we are very proud
of the significant strides the people of GN have taken to ensure strong
performance while building an even stronger strategic foundation for
GN as a fully integrated innovation powerhouse with substantial scale.
We would like to sincerely thank all employees for their great efforts.
Jukka Pertola, Chair – Peter Karlstromer, CEO
Letter from the Chair and CEO
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2023 key events
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GN unveils its two most ad-
vanced earbuds ever: the
new military standard ear-
buds
Jabra Elite 8 Active
and the new top
-tier ear-
buds
Jabra Elite 10
SteelSeries update
s its
lineup of
Apex Pro key-
boards and makes them
even faster
August
GN expands ReSound
OMNIA
and Beltone
Achieve
families enabling
more people to hear their
best in noise
GN
announces Jabra
Speak2
- next-generation
professional
speaker-
phones for hybrid working
February
March
GN ranks one of Fast Com-
pany’s
Most Innovative
Companies 2023
Jukka Pekka Pertola
takes
over as
new Chair of GN’s
Board of Directors
June
GN announces new AI-
powered features for its
Jabra
PanaCast 50 and
PanaCast 50 Room Sys-
tem
, r
evolutionizing hybrid
video conferencing
Søren Jelert
is appointed
new
Group CFO for GN
September
GN pioneers the next era of
hearing through sound, de-
sign, and connectivity with
ReSound Nexia
and
Beltone
Serene
GN completes
divestment
of
BelAudição, bringing in
net proceeds of DKK
~500
million
May
GN announces new four
pillar
capital plan
to reduce
debt and push all material
debt maturities to
Q3 2026
October
SteelSeries launches Alias
microphones
powered by
Sonar for Streamers
, creat-
ing and delivering the ulti-
mate streaming experience
for gamers
March
GN introduces Jabra Elite
4
, feature-packed earbuds
for both work and play
GN
expands the Jabra
Evolve2
range with head-
sets built for ultra
-flexible
hybrid working
August
Moving towards reaching
our climate
targets, four
major GN sites switch to
renewable energy
September
GN announces one-com-
pany organization
with
three business
divisions,
group
-wide functions of
scale
, and a new Executive
Leadership Team
Peter Karlstromer ap-
pointed
new Group CEO
for GN
November
GN announces company-
wide synergies of DKK
~600 million following one-
company integration
GN announces sale and
leaseback agreement of
the company’s headquar-
ter, generating net pro-
ceeds of DKK ~500 million
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Innovation and ecosystem leadership 7
Purpose and strategic focus 8
Building the foundation for future success 12
The
helicopter
view
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GN pioneered the next era of hearing
through sound, design, and connectiv-
ity with the launch of ReSound Nexia
and Beltone Serene.
Top rated for speech understanding in
noise, these hearing aids offer an unri-
valed sound experience and are the
first to support Bluetooth LE Audio in-
cluding Auracast broadcast audio, the
future of low energy connectivity.
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Innovation and ecosystem leadership
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GN stands on a 155-year proud legacy as technology innovator. Our engineers have over the years delivered multiple
world’s firsts. Now transforming GN into a fully integrated innovation powerhouse will further strengthen our capabilities to
deliver unique customer experiences, enhancing vital human senses
Definitions: BTE: Behind the ear; DSP: Digital Signal Processing; ANC: Active Noise Cancellation; e2e: Ear to Ear; M&RIE: Microphone & Receiver-In-Ear
In 2023, the R&D spend was DKK 1.7 bn, corresponding to an R&D revenue ratio of 9.5%
2000
1
st
to introduce
Bluetooth
®
headset,
enabling connectivity
to e.g. mobile phones
2003
1
st
to introduce an
open mini BTE, greatly
improving hearing
comfort
2004
1
st
dedicated gaming
headset, improving
performance for
gamers
2011
1
st
Bluetooth
headset with Active
Noise Cancellation
2013
1
st
Bluetooth
®
stereo headphones
with Dolby
2014
1
st
wireless earbuds
with built-in heart
rate monitor, helping
you train better
2018
1
st
to introduce di-
rect streaming from
Android using Blue-
tooth
®
Low Energy
2020
1
st
to introduce All
Access Directionality
& M&RIE, providing a
more natural sound
experience
2022
Hearing aids to ad-
dress number one
hearing aid challenge
– hearing speech in
noise
2004
1
st
digital amplifier
for enterprise com-
munication with DSP
2012
1st to introduce 2.4
GHz e2e technology,
improving hearing
aid connectivity
2014
1
st
made for iPhone
hearing aids enabling
audio connectivity
2015
Smart Hearing Alliance
with Cochlear benefit-
ting people with coch-
lear implants
2019
1
st
smart panoramic -
4k-pixel plug-and-
play enterprise video
solution
2021
New advanced hear-
ing technology de-
veloped for over-the-
counter in the U.S.
2023
1
st
hearing aid sup-
porting Bluetooth
®
Low Energy Audio
2.4 GHz
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Bringing people closer
For 155 years, GN has developed technology to bring people closer.
From the company’s inauguration and into the 20
th
century, people
across the world connected through GN’s telegraph technology. Later,
radio and mobile communication technology took over and further
down the road audio and hearing aid technology came into play. Now,
audio, video, gaming, and collaboration tools have become crucial in
how people connect and communicate in work and play.
All along, GN’s focus has been to facilitate meaningful human interac-
tions via customer-centric technology with the purpose of bringing
people closer to one another and what matters most to them.
Strong positions in attractive markets fueled by key megatrends
Over the past several years, GN has repositioned from mainly being per-
ceived as a hearing aid company to being a broader technology innova-
tion company. Today, we develop and market innovative hearing aids
for people with hearing loss; headsets, speakerphones, and video gear
for collaboration at work; a broad range of gear for gaming enthusiasts;
and true wireless earbuds for music, calls, and an active lifestyle – prod-
ucts that truly bring people closer.
Driven by our innovative and market-leading portfolio of hardware and
software technology solutions, GN enjoys strong positions across at-
tractive markets characterized by high barriers to entry, strong mega-
trends, and multiple long-term growth drivers.
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GN has competitive positions in
attractive markets driven by
strong megatrends
Strategic drivers
• Aging and growing populations
• Audio and video communication
replaces audio only
• Unified Communication moves
beyond the office
• Work-life becomes hybrid
• Low penetration rates across several
product categories
• Sustainability drives design and
manufacturing decisions
• Cyber and personal data security
• Gaming goes mainstream
• Regulatory shifts expanding markets
• Virtual meetings replace travel
• Consumerization of products and
channels
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Our strategic focus
GN continues to refine its proven growth model, focusing resources on
being a dedicated developer, manufacturer, and distributor, being a
trusted partner to our customers and partners throughout the globe.
An integral part of this asset-light business model is a collaborative ap-
proach to important eco-systems and strategic partnerships, allowing
GN to focus resources on what we do best and leverage partners where
they are the best.
GN’s fundamental strategy builds on hardware and software innova-
tion, combining our world-leading expertise and technologies. We will
grow our attractive hearing, enterprise, and gaming & consumer busi-
nesses leveraging our market access and our unique and synergistic
technology competencies.
GN’s strategy builds on hardware and
software innovation, combining our
world-leading expertise and technologies
Striving to modernize hearing care in core and emerging markets
Today, 80% of people with a hearing disability are non-users due to a
multitude of barriers. This is a major health and societal challenge as re-
search suggests a clear link between untreated hearing loss and cogni-
tive decline, and further documents that hearing aids may reduce de-
mentia risk by half.
GN strives to modernize hearing care to deliver relevant solutions to
people wherever they are and whenever they need it – whether in-per-
son, remote, or in any combination. This is pursued via GN’s innovation
philosophy of Organic Hearing with world-class sound quality and con-
nectivity. Additionally, focus is on further strengthening our service and
our unique non-competitive partnership with hearing care professionals
and building new ways of connecting with consumer and partners.
Utilize strong audio position to grow in video
GN’s strategy for its enterprise business is to maintain Jabra’s position
as the world’s leading enterprise audio brand and to build on the credi-
bility this position gives GN in businesses and IT departments of all sizes
to accelerate growth in enterprise grade video solutions.
With the prevalence of hybrid working models anticipated to continue –
on top of further penetration for enterprise products – the enterprise
audio and video markets are expected to offer growth in the future and
require products closely integrated into software vendor solutions such
as Microsoft Teams to best meet the needs of professionals and enter-
prises.
GN’s growth and market share gains in enterprise audio and video will
continue to be driven by product, software, and technology innovation
to ensure Jabra solutions offer the best audio and video solutions for all
businesses, regardless of their size or their choice of Unified Communi-
cation platform.
New market segments, such as frontline workers, and new software of-
ferings, such as the AI-based Jabra Engage AI, will create further
growth potential beyond the core enterprise audio, headset, speaker-
phone, and expanding video businesses.
Content
CASE STORY
Hearing aids may reduce
dementia risk by half
Health care cost is an increasing burden in many countries with
growing elderly populations. Technology is part of the solution
to lower cost and, not least, to improve quality of life. Many GN
solutions already play a role in healthcare – from audio and
video equipment facilitating physicians’ online consultations to
medical devices. Increasingly, sensors in earworn devices will be
able to assist with early detection of various deceases, also low-
ering healthcare cost and making life better for individuals.
A recent study* shows that for people with hearing loss the use
of hearing aids slowed cognitive decline by 48% for high-risk in-
dividuals. The study supports that hearing loss may be a modifi-
able risk factor for dementia, and that hearing aids may be used
as an interventional tool to slow cognitive decline in individuals
with higher risk of dementia.
The hearing industry has long suspected a clear link between
untreated hearing loss and risk of cognitive decline. This study
marks an important milestone as previous research between
hearing loss and dementia has predominantly been based on
retrospective studies relying on data collected after the fact.
For people with hearing
loss the use of hearing aids
slow cognitive decline by
48%
*) Johns Hopkins University School of Medicine: ACHIEVE study (Aging and
Cognitive Health Evaluation in Elders) www.achievestudy.org
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SteelSeries continues to grow as gaming goes mainstream
In 2023, there were around 1.5 billion gamers
1
globally across PCs, con-
sole, mobile, and other devices. Gaming has become ubiquitous, replac-
ing mainstream entertainment, and growth is expected to continue at
healthy rates going forward. It has become the preeminent form of so-
cial engagement. It is more than just entertainment - it is becoming a
lifestyle for all ages and genders.
SteelSeries was the original esports brand, and esports professionals
have won more money using SteelSeries gear than any other brand.
Over its 20+ years, it has become the brand of choice for those who
want to play like the pros. The focus for SteelSeries is to provide best-
in-class experiences through performance-enhancing software com-
bined with cutting-edge hardware. As a result, SteelSeries is one of the
fastest growing gaming gear brands in the world.
Focusing the product portfolio to create winners in consumer audio
GN’s world-class audio technology has strong application in the DKK
105 billion true wireless earbuds market. Today, consumers are looking
for products that keep up with their active lifestyles – from workout to
working from anywhere. To improve our impact in the market, we have
sharpened our product portfolio and our latest products, the Jabra Elite
10 and Elite 8 Active, have been racking up awards, including being rec-
ognized as the “Best running headphones of 2023”
2
and winning a CES
Innovation Award.
Integrated sustainability strategy with ambitious goals
Sustainability is integrated into our business strategies. In practice this
means that we aim to achieve our business goals at a minimal cost to
1
"Global Games Market Report”, Newzoo (gamers defined as “payers”)
2
By Run Testers, leading experts in the field.
the environment, while protecting the safety and rights of people
across our value chain.
In 2020, we set sustainability goals for 2025 in three priority areas: de-
carbonization, products and packaging, and health. In 2022, we added
science-based decarbonization targets for 2030. Due to significant pro-
gress in 2023, we are on track to meet our goals (see page 23).
We aim to achieve our business goals at
a minimal cost to the environment
Meanwhile, sustainability-related demands continue to increase from
customers, employees, legislators, and investors. We strive to meet
these demands proactively so that sustainability provides real value to
GN and our stakeholders, whether it is increasingly offering device-as-a-
service to support customers meet their circularity goals, scaling up
supply chain due diligence to meet new human rights legislation, or in-
vesting in charging capacity at our sites to enable our employees to
switch to cleaner cars.
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CASE STORY
Solving the hybrid challenges
Hybrid work increasingly becomes the new normal for millions
of knowledge workers around the world, challenging the way
we collaborate through online and hybrid meetings.
In our Jabra Hybrid Ways of Working 2023 Global Report*, we
found that how people were seen and heard, as well as how
well they could see and hear their colleagues in remote meet-
ings was impacting team trust, creativity, and innovation.
How much is the technology we’re using impacting our behav-
ior in meetings and our ability to collaborate effectively? Our
key findings are:
• Giving everyone the same professional equipment has a big
impact on their meeting experience
• Remote workers have increased presence, impact, and in-
clusion, when given the right equipment
• Meeting room equipment has a significant impact on re-
mote users’ meeting experience
• Technology influences how much we trust people in meet-
ings and trust is an enabler for all business. It opens and
closes doors, deals, and perhaps most importantly, it af-
fects our mental wellbeing and productivity at work
*) Meeting great expectations; behaviour, emotion, and trust (jabra.com) - A Jabra
study at the London School of Economics’ Behavioural Lab on the impact of tech-
nology on people in modern meetings (Meeting great expectations; behaviour,
emotion, and trust (jabra.com))
increase in engagement when using
optimized professional meeting-room
headset and video camera
84%
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CASE STORY
GN spearheaded the development of
the next generation of connectivity
For decades GN has been a pioneer in leveraging Bluetooth®
technology, bringing the first mobile headset to market and in-
troducing the first direct-wireless hearing aid, removing the
need for neck-worn devices.
Over 10 years ago, GN saw possibilities in a Bluetooth standard
protocol for the hearing aid industry, not only for increased ac-
cessibility but also for the wider community. Building on our
close audio business partnerships with large software vendors,
GN initiated the setup of a hearing aid working group within
the Bluetooth Special Interest Group (SIG), where GN took a
leading role in the development of a new Bluetooth standard -
Bluetooth Low Energy (LE) Audio.
GN has now introduced the first hearing aid supporting the
new Bluetooth LE Audio. ReSound Nexia and Beltone Serene
allow hearing aid users multiple simultaneous connections and
hands-free calls with Bluetooth LE Audio compatible devices,
as well as higher sound quality and significantly lower battery
consumption. And, with Auracast™ broadcast audio, this new
standard will allow hearing aid users to hear announcements in
public spaces, stream and share audio, transforming how users
experience audio in private and public spaces.
This new technology is not solely relevant to hearing aid users
but will be the future of how we all consume and share audio.
By taking a leading part in the development of the new stand-
ard, GN has ensured hearing aid users can benefit from this
new technology equally to non-hearing aid users, and that we
are ready to leverage the technology as it becomes relevant in
new innovations and devices.
At the hearing health industry’s Inter-
national EUHA Congress held in Oc-
tober 2023, GN showcased its newest
line of hearing technology, ReSound
Nexia and Beltone Serene, which sup-
ports the new Bluetooth® LE Audio
standard including Auracast™
…and as analysts and media re-
ported: “GN stole the show”.
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Simplifying our governance and organi-
zation, and fully utilizing GN’s scale
We remain excited and committed to our key markets – hearing aids,
enterprise collaboration, gaming gear, and consumer audio – where
attractive megatrends and GN’s strong positions will help us create
significant economic value.
In recent years, GN has worked to better exploit synergies within the
Group’s operating entities by increasingly sharing technologies across
R&D organizations, driving efficiencies in operations and supply chain,
and sharing back-office functions.
Transforming into a one-company setup
To unleash the full power of our organization, we in 2023 took the deci-
sion to simplify our governance and change our organization.
We established the foundation for successfully leveraging the signifi-
cant opportunities we have ahead of us. We strengthened our balance
sheet, changed our governance model, and began capturing early syn-
ergies from new ways of working, in parallel with executing well and de-
livering solid results.
On September 4, 2023, GN announced the Board’s decision to establish
a unified leadership with one Group CEO, one Group CFO, and a new Ex-
ecutive Leadership Team, replacing the previous governance model
with two sets of management for two separate companies as well as
parent company management.
Three targeted business divisions supported by functions of scale
On October 1, 2023, GN prepared to organize its business activities in
three divisions with clear accountability for customer and business suc-
cess: Hearing, Enterprise, and Gaming & Consumer.
At the same time, support and back-office functions were merged and
reorganized to drive scale and synergies across the company: R&D, Op-
erations, Finance, IT, People & Culture, and Strategy & Transformation.
The leaders of these divisions and functions of scale together with the
CEO and the CFO constitute GN’s new Executive Leadership Team.
These changes simplify our governance and strengthen the way GN op-
erates. Transforming from a dual leadership with dual organizations to
a single-string leadership and one unified company will remove internal
efficiency roadblocks, siloed systems and processes, and make the or-
ganization simpler, faster, and more impactful.
Utilizing common technologies and expertise across product groups
A cornerstone in driving more innovation in a fully integrated one-com-
pany setup is combining our different R&D organizations into one or-
ganization, addressing also the ongoing technology and segment con-
vergence more effectively. Leveraging scale and competencies while
maintaining a rigorous focus on different customer requirements – no-
tably the differences between medical and consumer regulation – is a
core element in creating a fully integrated innovation powerhouse.
While the types of challenges that our products are engineered to solve
for customers are highly varied, the technologies inside increasingly
converge, enabling better utilization of common standards and
Building the foundation
for
future success
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A simpler and more powerful
company, benefitting customers,
employees, and shareholders
Strategy &
Transformation
Operations
Finance
People &
Culture
IT R&D
Hearing
Gaming &
Consumer
Enterprise
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platforms. Technologies such as sound processing, Bluetooth and wire-
less connectivity, Artificial Intelligence, miniaturization, power manage-
ment, software ecosystems, and many more are developed and applied
across GN’s diverse product innovation.
Scale and critical mass within talents, ideas, technologies, and invest-
ments will allow us to innovate more, faster, and better, providing our
business divisions with more power to drive impact in their markets. All
to the benefit of customers specifically and all other stakeholders gen-
erally.
Reliable, diverse, and agile IT, operations, and supply chain services
The advantages of scale and uniform systems and processes equally ap-
ply in Operations, where we in the first half of 2023 started to combine
our diversified manufacturing and supply chain organizations.
This unified global operations organization manages a significant sup-
ply chain, delivering one product every second all year round, providing
significant scale benefits from procurement and component sourcing
through manufacturing and assembly to distribution and delivery. The
integration provides the opportunity to transform into a more cus-
tomer-centric operations and supply chain engine.
The transformation will also build on a modernization and streamlining
of IT, systems, and processes to further support efficient workflows and
enable GN’s 7,000+ employees to more freely collaborate and utilize
their unique competencies. Having a singular vision and serving a uni-
fied company will over time enhance IT's ability to leverage functional
scale to benefit across all GN’s business activities.
New Finance operating model
In mid-2023, GN commenced the reorganization of its separate finance
functions into one organization under the leadership of CFO Søren
Jelert, who joined GN in June 2023.
The finance organization now moves to a new operating model based
on a more scalable platform. This includes setting up a new in-house
service delivery center in Warsaw, Poland, supplementing such existing
centers in North America and China, driving consistency, scalability,
standardization, and automation of end-to-end core finance processes.
The new Warsaw-center will become operational in 2024.
Bringing our own people closer
The transformation into one fully integrated company will help ensure
GN is a great company to work for. It will free up managers’ and em-
ployees’ time and resources from working more unified to deliver to-
wards innovation, provide strong learning opportunities, enhance ca-
reer paths across the organization, and support employees’ careers
over time.
Scale and critical mass within talents,
ideas, technologies, and investments
will allow us to innovate more, faster,
and better
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Significant One-GN cost synergies
GN has identified DKK ~600 million in cost synergies from moving
to a one-company setup. Approximately two-thirds of these cost
savings (across COGS and OPEX) will be achieved in 2024 and the
remainder will be realized by 2026. The main sources of these syn-
ergies are shown below:
Operations
Eﬃciencies
& processes
Organization
DKK
~600m
3
1
2
Operations – DKK ~200 million
• Joint sourcing of core product
components (chipsets, hybrids,
etc.)
• Joint sourcing of commodities
(plastics, batteries, cables, elec-
tronics, mechanical parts, etc.)
• Joint sourcing of packaging and
accessories (packaging materials,
accessories, carrying cases, etc.)
1
Efficiencies & processes – DKK ~200 million
• Indirect procurement (IT software, marketing procurement, external consul-
tancy, IPR services, courier, HR activities, travel, etc.)
• Finance operating model (three regional shared delivery centers (SDC), consoli-
dation of European SDC in Poland)
• Other process initiatives (Office footprint optimization, alignment of IT systems,
etc.)
Organization – DKK ~200 million
• Re-organization (reducing 300 positions in over-lapping positions in new func-
tions of scale and capacity adjustments in new divisions)
• New ways of working (digitizing workflows, removing internal efficiency road-
blocks, siloed systems and processes)
2
3
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GN’s functions of scale develops and
manufactures cutting-edge hearing aids,
enterprise collaboration equipment,
gaming gear, and consumer audio
products that are marketed and sold in
around 100 countries across the world
Global reach, local presence
Research & Development
GN has R&D centers in Denmark, the
United States, the Netherlands,
Poland, France, and China.
The Group
has a unique blend of leading expertise of the human ear,
audio, video, speech, gaming, wireless technologies, software, and
miniaturization.
In 202
3, GN invested DKK 1.7 bn in research and development.
Manufacturing
GN has its
own
manufacturing sites for hearing aids in Denmark, China,
and Malaysia. Regional manufacturing centers are located in the
United States and Spain.
GN’s audio, video, and gaming products are produced by carefully se-
lected manufacturers
mainly in China and Southeast Asia. Most compo-
nents are sourced from suppliers in Asia. GN works with a small number
of tier
-one manufacturers supported by more than 100 sub-suppliers.
Sales and distribution
GN’s hearing aids are sold in around 100 countries across the world.
GN has its own
customer teams in 30+ countries and operates via part-
ners and distributors in another 70 countries.
GN’s audio, video, and gaming products are sold via distributors
, retail-
ers
, and GN’s own web-stores
in 80+ countries across the world. Partners
are responsible for logistics, local customization and final packaging to
optimize lead
-time to the final customer, delivering from four regional
centers in Mexico, Poland, China, and Hong Kong.
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Content
GN offices
Countries with direct sales
Countries with GN distributors
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Five year overview 16
Financial review 2023 17
Financial guidance 2024 21
Financial
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Jabra expanded the Evolve2 range
with the most comfortable headsets
built for ultra-flexible hybrid working.
The Evolve2 65 Flex is the most port-
able professional headset with best-
in-class ANC performance and fold-
and-go design to support work from
anywhere.
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DKK million
2019
2020
2021
2022
2023
GN Store Nord
Revenue
12,574
13,449
15,775
18,687
18,120
Revenue growth
19%
7%
17%
18%
-3%
Organic growth
15%
9%
20%
-3%
-1%
Gross profit margin
60.3%
54.3%
55.0%
48.9%
49.4%
EBITA*
2,321
1,866
2,619
1,560
1,200
EBITA margin*
18.5%
13.9%
16.6%
8.3%
6.6%
Operating profit (loss)
2,002
1,627
2,397
1,111
869
Financial items, net
-92
-6
-90
-405
-462
Profit (loss) before tax
1,913
1,612
2,271
725
343
Effective tax rate
23.3%
21.3%
21.2%
21.4%
22.4%
Profit (loss) for the year
1,468
1,269
1,790
570
266
Total assets
16,683
16,682
23,552
30,589
30,642
Total equity
4,849
5,178
6,229
6,800
9,587
ROIC (EBITA*/Average invested capital)
25%
19%
25%
9%
5%
Earnings per share, basic (EPS)
11.12
9.72
13.63
4.00
1.64
Earnings per share, fully diluted (EPS diluted)
10.98
9.63
13.49
3.99
1.64
Investments in property, plant and equipment
-232
-221
-457
-209
-351
Free cash flow excl. company acquisitions and divestments
1,296
1,865
702
-1,291
1,092
Cash conversion (free cash flow excl. company acquisitions and divest-
ments/EBITA*)
56% 100% 27% -83% 91%
Equity ratio
29.1%
31.0%
26.4%
22.2%
31.3%
Net interest-bearing debt**
4,805
3,755
4,829
14,561
10,567
Net interest-bearing debt (period-end)/EBITDA
1.8
1.6
1.6
7.1
6.0
Payout ratio
14%
16%
12%
-
-
Share buybacks***
1,626
453
1,166
-
-
Outstanding shares, end of period (thousand)
128,952
128,975
127,718
127,973
145,613
Average number of outstanding shares (thousand)
130,762
128,805
128,816
127,823
138,883
Average number of outstanding shares, fully diluted (thousand)
132,367
130,032
130,194
128,126
138,991
Treasury shares, end of period (thousand)
13,316
13,293
10,458
9,220
5,300
Share price at the end of the period
313.3
487.2
411.3
159.8
172
Market capitalization
40,401
62,837
52,530
20,444
25,016
* Please refer to Key Ratio Definitions on
page 132 for definition of EBITA ** Please refer to Key Ratio Definitions on page 132 for
definition
of Net interest
-bearing debt. NIBD figures have been adjusted to include Loans to dispensers as these are interest bearing
*** Including buybacks as part of the share-based incentive programs
DKK million
2019
2020
2021
2022
2023
GN Hearing
Revenue
6,351
4,725
5,332
6,227
6,802
Revenue growth
9%
-26%
13%
17%
9%
Organic growth
7%
-24%
16%
5%
13%
Gross profit margin
69.0%
61.5%
63.8%
62.7%
59.9%
EBITA*
1,284
41
643
453
554
EBITA margin*
20.2%
0.9%
12.1%
7.3%
8.1%
ROIC (EBITA*/Average invested capital)
19%
1%
9%
5%
7%
Free cash flow excl. company acquisitions and divestments
672
127
198
-377
269
Cash conversion (free cash flow excl. company acquisitions and divest-
ments/EBITA*)
52% 310% 31% -83% 49%
GN Audio
Revenue
6,223
8,724
10,443
12,460
11,318
Revenue growth
30%
40%
20%
19%
-9%
Organic growth
26%
42%
22%
-7%
-8%
Gross profit margin
51.5%
50.4%
50.6%
41.9%
43.0%
EBITA*
1,192
2,002
2,164
1,299
1,019
EBITA margin*
19.2%
22.9%
20.7%
10.4%
9.0%
ROIC (EBITA*/Average invested capital)
57%
81%
79%
17%
9%
Free cash flow excl. company acquisitions and divestments
849
1,729
1,288
-91
1,031
Cash conversion (free cash flow excl. company acquisitions and divest-
ments/EBITA*)
71%
86%
60%
-7%
101%
ESG summary
2019
2020
2021
2022
2023
Environmental
Scope 1 and 2 emissions (tons CO2e)
-
-
10,507
8,475
5,564
Scope 3 emissions (tons CO2e)
-
-
430,242
456,562
345,081
Social
Number of people with hearing loss helped (m)
9
9.1
9.4
9.8
10.5
Supplier ESG audits
49
39
40
31
61
Governance
Women in senior management (%)
20%
21%
21%
23%
22%
AGM-elected women on GN's Board (%)
40%
57%
57%
66%
50%
Five year overview
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Revenue
In 2023, the markets presented a mixed bag of tailwinds and head-
winds, but the company executed well and delivered strong results. GN
Store Nord’s revenue ended at DKK 18,120 million including organic
revenue growth of -1% compared to -3% in 2022 - in line with financial
guidance. The impact from the development in foreign exchange rates
was -2%.
GN Hearing
In the hearing aid business, GN executed strongly leading to market
share gains as a result of 13% organic revenue growth – in line with fi-
nancial guidance. The performance was broad-based across channels
driven by the successful ReSound OMNIA family with 12% organic rev-
enue growth in the Core business and 33% organic revenue growth in
the Emerging business. Revenue reached DKK 6,802 million, compared
to DKK 6,227 million in 2022, including M&A impact of -1% while im-
pact from foreign exchange rates was -2%.
In North America, the hearing aid market experienced strong volume
growth in 2023, somewhat higher than the historical 4-6% volume
growth. On the back of the robust hearing aid market, GN delivered
continued market share gains, realizing an organic revenue growth of
20% in 2023.
The performance in the U.S. Veterans Affairs (VA) was characterized by
a stabilized market share position as a result of the ReSound OMNIA
launch in late 2022. The VA channel has proven more sticky than the
rest of the market, but the stabilization of the market share has pro-
vided a solid foundation for ReSound Nexia, which will be available by
May 1, 2024.
The reception of Jabra Enhance Pro 10 at a large retailer was very
strong and drove a meaningful part of the overall growth for North
America. By late 2023, Jabra Enhance Pro 20 was launched into the re-
tailer with strong early feedback.
In the independent channel, GN continued to win market share driven
by ReSound OMNIA and with strong initial reception of ReSound Nexia
in late 2023. In the online channel/OTC, GN performed strongly with
33% organic growth in the Emerging business. The overall revenue in
North America ended at DKK 3,407 million (compared to DKK 2,939
million in 2022), equal to revenue growth of 16% with M&A impact of
-2%, while impact from foreign exchange rates was -2%.
In Europe, the hearing aid market experienced volume growth slightly
below the historical 4-6% growth rate. Despite the challenging market
conditions and a difficult comparison base, GN took market share and
delivered organic revenue growth of 5%. The performance was sup-
ported by strong execution in especially France and the U.K. The over-
all revenue in Europe ended at DKK 1,887 million (compared to DKK
1,794 million in 2022), equal to revenue growth of 5% with M&A impact
of 1%, while impact from foreign exchange rates was -1%.
In Rest of World, the hearing aid market experienced a general catch-
up following COVID-19 with market volume growth above the histori-
cal 4-6% growth rate. GN performed strongly leading to organic reve-
nue growth of 6% driven by strong performance in Australia, China,
and Japan on top of a difficult comparison base. Overall revenue in
Rest of World ended at DKK 1,508 million (compared to DKK 1,494 mil-
lion in 2022), equal to revenue growth of 1%, while impact from foreign
exchange rates was -5%.
Financial review 2023
Revenue (DKKm) and organic revenue growth (%)
Revenue distribution
6,351
4,725
5,332
6,227
6,802
4,680
7,221
8,271
8,677
7,463
1,543
1,503
2,172
1,466
1,253
2,317
2,602
2019 2020 20222021 2023
Org.
growth
15% 9% 20% -3% -1%
18,687
18,120
15,775
13,449
12,574
Revenue Consumer business (DKKm)
Revenue Gaming business (DKKm)
Revenue Enterprise business (DKKm)
Revenue Hearing business (DKKm)
North
America
38%
Europe
41
%
Rest of
World
21%
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GN Audio
In the Enterprise business, GN executed solidly in challenging market
conditions and against a high comparison base, while defending its
global market leadership, thus positioning GN well for the anticipated
enterprise market recovery. SteelSeries continued its strong execution,
and once again took significant market share in a flat market, while the
Consumer business took important steps to improve profitability by
narrowing the product portfolio. The execution led to -8% organic reve-
nue growth for GN Audio – in line with financial guidance. Revenue in
2023 reached DKK 11,318 million, compared to DKK 12,460 million in
2022, while impact from foreign exchange rates was -1%.
In the Enterprise business, GN was negatively impacted by challenging
market conditions driven by macro uncertainty and buyer hesitancy,
although with some market stabilization during the year. Moreover, the
enterprise market faced a high comparison base from 2022, when sup-
ply chain constraints easened, resulting in estimated double-digit nega-
tive market growth. As a result of continued channel execution and the
market-leading product portfolio, Enterprise revenue was DKK 7,463
million compared to DKK 8,677 million in 2022 translating into organic
revenue growth of -13%.
In the Gaming business, SteelSeries was exposed to a flat gaming gear
market development in 2023. In this stabilized market, SteelSeries con-
tinued to take advantage of its premium and innovative product port-
folio and continued channel execution to once again win significant
market share. In addition, SteelSeries executed very well on inventory
reduction initiatives. The strong performance resulted in revenue of
DKK 2,602 million compared to DKK 2,317 million in 2022 translating
into organic revenue growth of 16%.
In the Consumer business, GN was exposed to a broader consumer
market that saw some stabilization during the year. GN took important
actions to restructure the Consumer business by narrowing the product
portfolio to set the business up for growth and profitability. An im-
portant lever in the execution was related to the launch of one mid-
range and two new premium true wireless earbuds, Jabra Elite 8 Active
and Elite 10, which were brought to market in Q3 and drove a signifi-
cant part of the revenue at the end of the year. Due to the execution
across the business, the true wireless earbud category (which is the
clear majority of the revenue in the Consumer business) experienced
some growth in 2023. As a result, the Consumer revenue was DKK
1,253 million compared to DKK 1,466 million in 2022 translating into
an organic revenue growth of -13%.
Gross Profit
GN Store Nord’s adj. gross profit reached DKK 9,038 million compared
to DKK 9,283 million in 2022. The adj. gross margin ended at 49.9%
(compared to 49.7%) and was negatively impacted by the revenue
decline in Enterprise, promotional activities in the consumer-facing
businesses as well as negative mix in the hearing aid business, but
somewhat offset by the easing of freight costs.
GN Hearing
Adj. gross profit reached DKK 4,169 million corresponding to a gross
margin of 61.3% compared to 63.6% in 2022. The gross margin was
positively impacted by pricing initiatives of the premium launches, but
more than offset by retail disposals including BelAudição as well as a
negative channel/country mix.
GN Audio
Adj. gross profit reached DKK 4,869 million corresponding to a gross
margin of 43.0% compared to 43.5% in 2022. The development reflects
a negative business mix as well as ongoing broadly promotional
activities in the consumer-oriented businesses, but almost offset by a
price increase in Enterprise as well as easing freight costs.
OPEX
GN Store Nord’s adj. OPEX ended at DKK -7,244 million in 2023
compared to DKK -7,218 million in 2022. The development reflects
continued cost reduction measures implemented throughout the year
on top of inflationary impact and IT investments.
GN Hearing
Following a few years of ongoing cost reduction measures to right-size
the cost base, further initiatives were executed during 2023 with the
aim to keep OPEX in check compared to 2022. Consequently, total
OPEX excl. non-recurring items and hedging effects ended at DKK -
3,361 million, equal to a increase of 2% compared to 2022.
GN Audio
OPEX was prudently managed during the year with an 7% reduction in
selling and distribution costs as a consequence of cost reduction
measures. This was partly offset by investments into IT. Consequently,
total OPEX excl. non-recurring items and hedging effects ended at DKK
-3,672 million, equal to a decrease of 1% compared to 2022.
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EBITA
GN Store Nord’s adj. EBITA was DKK 1,794 million compared to DKK
2,166 million in 2022 (EBITA in Other ended at DKK -211 million ex-
cluding non-recurring items of DKK -160 million). The decline was pri-
marily driven by negative operating leverage in GN Audio as a result of
the revenue decline as well as ongoing promotional activities in the
consumer-oriented businesses. As a result, GN Store Nord’s adj. EBITA
margin ended at 9.9% compared to 11.6% in 2022. Reported EBITA was
DKK 1,200 million, reflecting non-recurring items of DKK -594 million
due to initiatives to restore profitability across the group including the
announced synergy initiatives.
GN Hearing
GN Hearing’s adj. EBITA was DKK 808 million, with the Core business
delivering adj. EBITA of DKK 960 million, equal to an EBITA margin of
14.7% compared to 13.1% in 2022, in line with the financial guidance.
The development reflects the significant market share gains on top of
tightly managed OPEX driving operating leverage. The Emerging busi-
ness delivered EBITA of DKK -152 million due to continued investments
in lead generation to drive topline growth. Reported EBITA for GN
Hearing amounted to DKK 554 million reflecting non-recurring items of
DKK -254 million.
GN Audio
GN Audio’s adj. EBITA ended at DKK 1,197 million, translating into an
adj. EBITA margin of 10.6%, compared to 14.1% in 2022, which was in
line with financial guidance. The development reflects the revenue de-
cline, partly off-set by tightly managed OPEX. Reported EBITA was
DKK 1,017 million, reflecting DKK -180 million in non-recurring items.
Other profit & loss items
In 2023, amortization of acquired intangible assets amounted to DKK
-392 million compared to DKK -440 million in 2022. Financial items
were DKK -462 million in 2023 compared to DKK -405 million in 2022,
primarily driven by increasing financing costs as a consequence of the
increasing interest rate levels.
In 2023, share of profit (loss) in associates was DKK -64 million com-
pared to DKK 19 million in 2022. Gain (loss) on divestment of opera-
tions, etc. was DKK 61 million compared to DKK -9 million in 2022 pri-
marily due to a non-cash gain from the disposal of BelAudição. Adj.
profit before tax was DKK 937 million (reported profit before tax was
DKK 343 million) compared to DKK 1,349 million in 2022.
The effective tax rate was 22.4% (an increase of around 1 percentage
point due to a previous R&D tax relief scheme in Denmark not being
prolonged), translating into an adj. net profit of DKK 727 million (re-
ported net profit of DKK 266 million) compared to DKK 1,060 million in
2022.
Free cash flow
GN Store Nord delivered a substantial free cash flow excl. M&A of DKK
1,092 million compared to DKK -1,291 million in 2022, mainly driven by
the solid earnings level and a positive change in working capital related
to inventory reductions as well as a significant improvement in trade
payables driven by a new commercial agreement with a major manu-
facturing and logistics provider.
In addition to the strong operational cash flow, M&A contributed with
an additional DKK 405 million primarily explained by the disposal of
BelAudição. As a result, total free cash flow ended at DKK 1,497 mil-
lion.
Adj. EBITA (DKKm) and Adj. EBITA margin (%)
*Excluding non
-recurring items in 2019, 2020, 2021, 2022, and 2023
Free cash flow excl. M&A (DKKm) and cash conversion (%)
1,284
41
643
786
960
-187
-152
1,244
1,888
2,209
1,759
1,197
-155
-177
-188
-192
-211
2019 2020 2021 2022
Adj. EBITA
margin*
18.9% 13.0% 16.9% 11.6% 9.9%
Adj. EBITA GN Hearing Emerging business (DKKm)*
Adj. EBITA GN Hearing Core business (DKKm
)*
Adj. EBITA GN Audio (DKKm
)*
Adj. EBITA Other (DKKm)*
2,373
2,664
2,166
1,794
1,752
2023
1,296
1,865
702
-1,291
1,092
2020 20222019 2021 2023
Free cash ﬂow excl. M&A
Cash
conversion
56% 100% 27% -83% 91%
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Capital structure
Net interest-bearing debt decreased significantly by 27% to DKK
10,567 million compared to DKK 14,561 million by the end of 2022,
driven by the strong free cash flow generation including the disposal of
BelAudição as well as the private placing of 17 million shares. The adj.
leverage ended at 4.5x as a result of the strong decrease in net inter-
est-bearing debt, only partly offset by the negative impact on adj.
EBITDA from the revenue decline. Reported leverage ratio was 6.0x re-
flecting DKK -594 million non-recurring items. By the end of 2023, GN
had cash and cash equivalents of DKK 2,162 million. Moreover, GN has
access to an undrawn revolving credit facility of DKK 3.9 billion (EUR
520 million) with maturity in Q2 2027.
Capital plan
In May, 2023, GN announced a new capital plan to prepare for repay-
ment of approximately DKK 7 billion debt that matures in 2024 and ef-
fectively pushes all material debt maturities to Q3 2026. Execution of
the four pillars of the plan continues to progress well. The pillars are:
• Equity: An accelerated bookbuild of a directed issue and private
placing of 17 million new shares and existing treasury shares exe-
cuted on May 24, 2023, which generated DKK 2.6 billion net pro-
ceeds
• Debt refinancing: New DKK 6.0 billion (EUR 800 million) term loan
facility maturing in 2026 replaced existing DKK 3.9 billion (EUR 520
million) term loan. The new loan was signed and finalized on Sep-
tember 27, 2023
• Disposals: DKK 1.0 – 2.0 billion to be generated by disposals of se-
lected assets. Disposal of BelAudição generated DKK ~500 million
in Q3 2023. Moreover, GN has arranged a sale and leaseback of the
company’s headquarter, which generated net proceeds of DKK
~500 million during Q4 2023
• Operational measures: Cash at hand and positive free cash flow
excl. M&A for 2023 and 2024 at Group level; DKK 1.1 billion cash
flow excl. M&A generated in 2023
Net interest-bearing debt (DKKm)
4,805
3,755
4,829
14,561
10,567
2019 2020 20222021 2023
Net interest-bearing debt (DKKm)
Adj.
leverage
2.0x 1.8x 1.8x 5.5x 4.5x
Financial overview 2023
GN Hearing
GN Audio
DKK million - 2023
Core
business
Emerging
business
GN
Hearing
Enterprise
Consumer
Steel-
Series
GN
Audio
Revenue
6,535
267
6,802
7,463
1,253
2,602
11,318
Organic growth
12%
33%
13%
-13%
-13%
16%
-8%
Adj. EBITA**
960
-152
808
1,197
Adj. EBITA margin**
14.7%
11.9%
10.6%
Group total*
GN Hearing
GN Audio
DKK million
2023
2022
Growth
2023
2022
Growth
2023
2022
Growth
Revenue
18,120
18,687
-3%
6,802
6,227
9%
11,318
12,460
-9%
Organic growth
-1%
-3%
13%
5%
-8%
-7%
Adj. Gross profit**
9,038
9,384
-4%
4,169
3,963
5%
4,869
5,421
-10%
Adj. Gross profit margin**
49.9%
50.2%
-0.3%p
61.3%
63.6%
-2.3%p
43.0%
43.5%
-0.5%p
Adj. EBITA**
1,794
2,166
-17%
808
599
35%
1,197
1,759
-32%
Adj. EBITA margin**
9.9%
11.6%
-1.7%p
11.9%
9.6%
2.3%p
10.6%
14.1%
-3.5%p
Adj. Earnings per share (EPS)***
6.82
10.54
-35%
Free cash flow excl. M&A
1,092
-1,291
2,383
269
-377
646
1,034
-91
1,125
* Including "Other"
** Excluding non
-recurring items (DKK -180 million in OPEX in GN Audio, DKK -93 million in COGS in GN Hearing, DKK -161 million in OPEX in GN Hearing and DKK -160 million in OPEX in
Other) in 2023. Excluding non
-recurring items (DKK -196 million in COGS in GN Audio, DKK -264 million in OPEX in GN Audio, DKK -56 million in COGS in GN Hearing and DKK -
90 million in
OPEX in GN Hearing) in 202
2
*** Excluding non-recurring items (DKK -594 million in 2023 and DKK -624 million in 2022) and amortization of acquired intangible assets
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Key assumptions
Hearing division
Following a very strong market growth in 2023, GN expects the mar-
kets to return to historical growth rates supported by ongoing favora-
ble demographic trends. As such, GN projects 4-6% market volume
growth and -1% to -2% market ASP decline.
Driven by the overwhelmingly positive feedback on ReSound Nexia, GN
expects continued strong market share gains on top of a very success-
ful 2023. Consequently, the Hearing division assumes to contribute
with organic revenue growth of 8% to 12%. Moreover, the underlying
assumptions include an EBITA margin in the core hearing aid business
of 18% to 20%.
Enterprise division
Following some very difficult years in the broader Enterprise equip-
ment market, 2023 saw some general volume stabilization. Supported
by early signs of a healthier PC market at the end of 2023 and an ex-
pected increase in broader IT equipment spend during 2024, GN pro-
jects that the addressable Enterprise market will return to positive
value growth sometime during 2024.
GN expects to be able to continue to defend its market-leading position
in Enterprise headsets driven by the updated and innovation-led prod-
uct portfolio and to win market share in Enterprise video due to our in-
dustry-leading offering, channel access strength, and strong partner-
ships with leading software vendors. Consequently, the Enterprise divi-
sion assumes to contribute with organic revenue growth of -3% to 5%.
Gaming & Consumer division
The broader Consumer market experienced general stabilization during
2023, following a very difficult 2022. Despite the current macro eco-
nomic headwinds and related impact on consumer sentiment, GN pro-
jects a slightly growing value market for GN’s addressable Gaming &
Consumer market in 2024.
GN expects to be able to defend its market share in the true wireless
segment driven by continued innovation and continue to gain market
share within SteelSeries because of the very strong brand and innova-
tion leadership. Consequently, the Gaming & Consumer division as-
sumes to contribute with organic revenue growth of 2% to 10%.
Financial guidance 2024
Forward-looking statements
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. Changes to such expectation and assumptions will not
be disclosed on an ongoing basis, unless required pursuant to
general disclosure obligations to which GN is subject.
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 as well
as foreign exchange rates, 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).
For more information, please see the "Management's report"
and "Risk management” sections in this Annual Report. This
Annual Report should not be considered an offer to sell
securities in GN.
organic revenue
growth
2% to 8%
12%
to 14%
EBITA
margin
>700
Free cash ﬂow
excl. M&A (DKKm)
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ESG progress 23
Impact across our value chain 24
Double materiality assessment 25
ESG
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The Arctis Nova Pro wireless headset from
SteelSeries provides high fidelity audio, 360
degrees spatial audio, Sonar audio software
suite, and Pro Grade Parametric EQ - and is
the first gaming headset to gain TCO certi-
fication, the leading sustainability certifica-
tion for headsets.
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In 2023, we made significant progress
towards our ESG goals
Our current ESG agenda is centered around three pillars: Health, cli-
mate, and products and packaging.
In the health pillar, we during 2023 met our target to help 10 million
people with hearing loss ahead of our 2025 target.
In the climate pillar, we made significant progress towards our decar-
bonization goal in scopes 1 and 2, and have also reduced emissions in
scope 3. With the plans and activities we have initiated, we expect the
major decarbonization effects in scope 3 to take place 2025-2030.
In the products and packaging pillar, we have significantly increased
the use of recycled plastics in our products and are on track to meet
our 2025 target, while the vast majority of our packaging already now
meets the sustainability requirements set for 2025.
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* Calculated using sales volumes of GN hearing aids and assumptions based on EHIMA figures for binaural treatment and
replacement rates (five years for high -income countries and eight years for low-income countries)
** Measured as % of total weight of mechanical parts
Health
2023
progress
Help 10 million people with
hearing loss by 2025
We estimated that we helped 10.5* million
people with hearing loss
(see page 37)
We continued to invest in cognitive health
research and greater awareness of hearing
health (see page 37)
We have engaged in several philanthropic
activities (see page 37)
Create awareness of hearing loss
and add new health functionality to
our products by 2025
Support unmet hearing health
needs through donations and
capacity-building (ongoing)
Target
Climate
2023 progress
We have reduced scope 3 emissions by 20%
vs our 2021 baseline (see page 27)
We have reduced scope 1 and 2 emissions
by 47% compared to our 2021 baseline
(see page 27)
We have reduced the carbon footprint of
business travel per employee by 17% vs a
2019 baseline
Reduce carbon emissions in scopes
1 and 2 by 80% by 2030
Reduce carbon emissions in scope 3
by 25% by 2030
Halve the carbon footprint of
company air travel per employee
compared to 2019 (ongoing)
Target
Products and
packaging
2023 progress
We launched nine products containing
recycled plastic, of which four already meet
the 50% target (see page 30)
62% of our newly launched products met
our sustainable packaging requirements
(see page 30)
We have taken several circularity initiatives
(see page 31)
Use at least 50% non-virgin
material** in new products by 2025
Minimal plastic, small size, FSC -
certified packaging for all new
products by
2025
Give more products a second life
through take-back schemes, repair,
or refurb by
2025
Target
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HCP
Impact across
our value chain
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Our investors
Delivering shareholder value by
executing on the company strategy
Key resources
Engaged and focused people
Innovation and ecosystem leadership
Global reach, local presence
Our customers and partners
Creating products, services,
and experiences that thrill
customers and partners
Our people
Providing a great, safe, and
rewarding place to work with
equal opportunity for all
Our world and environment
Pursuing responsible and inclusive business
practices. Designing environmentally conscious
products, services, and operations
Maximize positive impact
Minimize negative impact
Value chain
Value created
A fully integrated innovation powerhouse
with strong positions and substantial future
growth opportunities in attractive hearing,
audio, video, and gaming markets
Maximize
energy
efficiency,
switch to
renewable
energy
Reduce
emissions
from operations,
production, and
distribution
Provide
good jobs;
safeguard
human rights
across our
value chain
Promote
gender equality,
diversity, and
inclusivity
Enable
millions of people
to hear well
Innovate
for effective
remote collaboration:
reduce business travel
Traffic safety and
wellbeing for drivers
Increase circularity:
takeback schemes,
recycling, and reuse
Expand repair and
refurbish programs:
extend product lifespan
Reduce consumption of raw
materials; ensure responsible
sourcing of minerals
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Getting ready for EU CSRD reporting
GN is subject to the EU’s Corporate Sustainability Reporting Directive
(CSRD), and in accordance with this directive, our Annual Report for
2024 will comply with its reporting standards. As specified in the stand-
ards, in 2023 we have executed a double materiality assessment to set
the scope for CSRD-compliant reporting from next year onwards.
Methodology
We executed the double materiality assessment by scoring 132 ESG
sub-topics contained in the 12 standards on a scale from 0-5 on two pa-
rameters:
• Actual or potential impact of GN on people and environment (e.g.
air pollution as a consequence of manufacturing of our products)
• Actual or potential financial risk to GN as a consequence of this
topic (e.g. the cost to GN’s operations of climate adaptation)
A scoring key and methodology were developed in accordance with the
standard and 27 internal and 8 external stakeholders were consulted in
the scoring process. We made a distinction between ‘own operations’,
which will all be in scope for full-year 2024 reporting and ‘value chain’
topics, some of which will phase in as reporting requirements over the
next years. Topics that are scored a 2 or above are considered material
to GN, while topics that are scored 3 or above are considered highly
material to GN.
Results
Based on our current understanding, we assess around half of sub-top-
ics to be either material or highly material for our own operations. We
continuously review materiality of topics based on additional EU
guidance and/or data and insights, and will adjust materiality scores ac-
cordingly ahead of FY2024 reporting if needed. For our value chain, our
assessment shows that a larger number of topics are material, reflect-
ing a higher number of (potential) ESG impacts in some of the indus-
tries on which we depend. Our reporting on value chain topics will re-
flect that some of these topics require less quantitative data and will
phase in after financial year 2024.
Next steps
In 2024, we will implement an updated ESG reporting framework with
robust reporting processes, systems, and controls to report on all
highly material topics (score ≥3) for disclosures related to our own op-
erations, and where relevant our value chain, in accordance with the
standards.
For material topics (score ≥2-3) we will closely track evolving guidance
and consensus from the EU, assurance providers, and within our indus-
tries in several areas in which there is currently a lack of clarity on how
to interpret the standards. Where this impacts scoring, we will make re-
quired adjustments to the scope of our full-year 2024 reporting.
Double materiality assessment
31%
21%
48%
Highly material Material Not material
Materiality of
topics in
own operations
Materiality of topics in
value chain
45%
35%
20%
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Overview of highly material topics
Own operations
Dependence on
suppliers to mitigate
ESG impacts
Health and safetyCarbon emissions in
scope 1+2
Violence and
harassment
Energy use
Gender equalityResource inﬂow and
outﬂow
Adequate wage (blue
collar)
Substances of concern
Waste
Dependence on
suppliers to mitigate
ESG impacts
Health and safetyCarbon emissions in
scope 3
Secure employmentEnergy use
Violence and
harassment
Water, soil, and food
pollution
Work -life balance and
adequate wages
Substances of (very
high) concern and
microplastics
Social dialogueWater withdrawal and
discharge
Freedom of association
and collective
bargaining
Biodiversity
(land use
,
species extinction, and
pollution)
Child and forced laborResource inﬂow
(Gender) diversity and
inclusion
Production waste
Value chain
Environment Social Governance
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Decarbonization 27
Responsible manufacturing 28
Product sustainability 29
Circularity 31
Sourcing 32
Environment
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Jabra PanaCast 50 Video Bar System
facilitates next-level hybrid meeting
experiences with a full suite of flexi-
ble, scalable deployment options,
offering a more collaborative and
inclusive experience on native Unified
Communications applications like
Microsoft Teams Rooms and Zoom
Rooms.
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Total emissions have decreased 20%
since 2021
By 2030, GN will reduce absolute CO
2
emissions from our own opera-
tions by 80% and from our value chain by 25% from a 2021 baseline.
These targets were validated by the Science Based Targets initiative in
2022. We are committed to reaching net-zero by 2050, at the latest.
Scopes 1 and 2 – Our major sites now run on renewable power
Approximately 68% of our scope 1 and 2 emissions come from electric-
ity use. To achieve our scope 1 and 2 target, we are focusing on energy
efficiency and rapidly increasing the share of energy consumption from
renewable sources. Read more about energy efficiency on page 28.
In 2023, we increased renewables share from 9% to 30% mainly by se-
curing renewable power for our largest sites (see calculation methodol-
ogy on page 57). Together, the initiatives implemented reduce scope 1
and 2 emissions by 34% from 2022 and by 47% from 2021.
As of July 2023, the GN headquarters and production in Denmark have
been powered by a new solar farm in Jutland, Denmark, via a power
purchase agreement (PPA). The PPA reduces annual scope 1 and 2
emissions by ~20% compared to 2021.
Our largest production site in Johor, Malaysia, accounted for ~15% of
GN’s power consumption and 34% of location-based scope 2 emissions
in 2023. To ensure our transition to renewable energy leads to real de-
carbonization, ‘additionality’ is a requirement when we procure clean
power. This means that we purchase energy attribute certificates
(EACs) from local, newly built projects. For at least 2023-2026, our Ma-
laysian site will be running on renewable power through a long-term
energy attribute certificate (EAC) purchase agreement. The energy is
generated from a solar rooftop installation at an industrial facility in
Malaysia, which was commissioned in 2021.
Finally, we procured EACs from a hydropower project in China and a
wind power project in the U.S., covering electricity consumed at our
production sites in Xiamen and Bloomington, Minnesota, respectively.
This cut scope 1 and 2 emissions by ~1526 tCO
2
e (15%) from 2021.
GN’s energy consumption in 2023
Split of non-/renewable energy sources and contractual instruments for sites where GN holds
the contract with the energy provider.
Scope 3 – Freight emissions reduced by 29% since 2022
GN’s largest climate impact comes from our products and their trans-
portation to customers around the world. These activities therefore lie
at the heart of our decarbonization strategy. Products and packaging
decarbonization initiatives, including product design and supply chain
engagement, are detailed on pages 29-30 and 32.
In 2023, we increased ocean freight share, which cut inbound freight
emissions by ~40,250 tCO
2
e. This makes up 72% of the 55778 tCO2e
reduction in scope 3 (category 4) in 2023 compared to 2021.
Decarbonization
Content
Content
40.7%
59.3%
1.0%
29.5%
10.2%
10.2%
18.1%
31.
1%
Supplier Guarantees of Origin
Renewable energy
Energy attribute certificates
Non-renewable energy
Gas
Residual mix electricity
District heating
Power purchase agreement
Our carbon footprint
We completed a full scope 3 inventory aligned with the GHG
Protocol Corporate Standard. The chart shows the relative size
of emission sources along our value chain.
Scope 1 and 2 emissions roadmap
We will close the gap to our 2030 scope 1 and 2 emission reduction
target by increasing energy efficiency at our major sites and mov-
ing to renewable energy where possible for all remaining sites.
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7% 18%
0.3%19%
32%
Raw materials and
manufacturing
Indirect procurement
and investments
Transportation
and retail
Product use
End of life
Employee travel
and commuting
42%
Historical emissions
Emissions trajectory
Power purchase agreement
EAC long-term purchase agreement
Other green power initiatives
10,092
10,507
8,475 5,564
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
80%
by 2030
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Environmental management
To ensure we continuously minimize the environmental impact of our
manufacturing processes and comply with relevant legislation, our
global manufacturing sites in China and Malaysia are ISO14001 certi-
fied, alongside our repair center in China.
Manufacturing of products outside of our hearing aid portfolio is out-
sourced. Here, all tier 1 manufacturing suppliers are ISO14001 certi-
fied. See page 32 for how we engage more broadly on environmental
topics with our suppliers.
Energy
Energy efficiency is a high priority across all our sites. An energy audit
was conducted at our global production site in Johor, Malaysia, which is
our most power intensive manufacturing site. The audit identified a po-
tential reduction in annual electricity consumption of up to 6%. The ex-
pected saving mainly comes from changes to the chiller system, which
currently accounts for around 46% of the site’s total power consump-
tion.
In early 2023, we also finished changing all our lighting to LEDs at our
regional operations center in Bloomington, Minnesota, U.S.
Waste
Local licensed waste management providers collect and treat hazard-
ous and non-hazardous waste generated by all GN manufacturing sites.
At our global production site in Xiamen, China, we have implemented a
recycling initiative for Isopropanol (IPA) - a hazardous cleaning agent
used in the manufacturing process. By purchasing specialist equipment,
the site expects to reduce annual IPA waste by 80%.
Water
Water consumption at GN’s facilities is limited and primarily used for
heating, cooling, and sanitary purposes. Initiatives to reduce water con-
sumption include daily monitoring of water use, stormwater collection,
and using auto stop water. Total water use at GN’s manufacturing facil-
ities increased by 3% from 2022.
Responsible manufacturing
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11,569
11,714
11,680
2021 2022 2023
277
269
227
2021 2022 2023
45,279
51,257
52
,838
2021 2022 2023
Energy consumption
Total energy use in GN-operated manufacturing sites (MWh)
Waste
Total waste generated by all GN manufacturing sites (mt)
Water use
Total water use at GN manufacturing sites (m
3
)
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Sustainability is a key consideration in
how we design, manufacture, package
and transport our products
Product safety and compliance
At the foundation of our product development, we make no compro-
mises when it comes to the safety of the users of our products. To en-
sure our products do not contain hazardous or harmful materials, we
comply with the European Restriction of Hazardous Substances Di-
rective (RoHS) and Registration, Evaluation, Authorization and Re-
striction of Chemicals (REACH) regulations, as well as various regional
regulations. We closely monitor additional emerging product-related
legislation, such as EcoDesign, right to repair, and further restrictions
on chemicals, and aim to proactively make required changes to comply.
In 2023, for our hearing products, we conducted required biological
evaluations of all new products according to ISO 10993-1:2020. This
means the hearing device is tested to evaluate the interaction with us-
ers’ tissue, cells, or body fluids. We continuously monitor regulatory
changes and adjust internal processes accordingly. Our hearing prod-
ucts are developed under a highly regulated quality system complying
with ISO 13485 and FDA 21CFR 820 CGMP, as well as other national
standards including the latest regulations in Europe (EU MDR
2017/745/EU).
TCO Certification as a minimum standard for relevant products
Our ambitions for product sustainability go further than simply follow-
ing legislation. To meet highest industry standards in product sustaina-
bility, we have assessed the relevance of a wide variety of sustainability
certifications. To ensure legitimacy, we applied two criteria when se-
lecting certifications to strive for: full value chain coverage and based
on a standard developed independently of GN. TCO Certified was the
only certification that matches both criteria, and is therefore our sus-
tainability baseline for all products for which TCO Certified provides
certification.
This means our products, processes, and corporate governance un-
dergo rigorous testing to ensure we meet strict requirements in socially
and environmentally responsible manufacturing, user health and
safety, product performance and durability, reduction of hazardous
materials and packaging. The latest TCO standard for our headsets can
be found here
.
In 2023, SteelSeries' Arctis Nova Pro Wireless became the first gaming
headset in the world to become TCO Certified. We also continued to
certify many of our Jabra products including four product lines from
our Elite true wireless range, adding to the products that were already
certified. As TCO Certified develops standards for additional product
categories such as video, we will strive to get more products certified.
For a full overview of TCO Certified GN products, search for GN brands
on https://tcocertified.com/product-finder/.
Our approach to sustainable product development
When developing new products we consider sustainability in every
lifecycle phase, from inception to end-of-life (see graphic). Beyond
making sure we meet legislative and TCO Certified requirements, we
use product-level life-cycle assessments (LCAs) of existing products to
optimize for decarbonization in subsequent products. GN conducted
LCAs on 20 products, with our first LCAs being completed for Gaming
and Hearing products. Through these LCAs we have learned that:
• Rechargeable hearing aids have a 29% lower climate impact than
hearing aids using disposable batteries (excluding charging or end
user case)
Product sustainability
Content
Sustainability in the product
lifecycle
Execute studies for sustainability areas that cannot be cap-
tured in a single product development process
Set minimum requirements and targets
Implement minimum requirements and targets
Clearly communicate qualities of product without
greenwashing
Assess user demand for additional features that can be im -
plemented in-market
Contribute to giving products a second life through
WEEE compliance and circularity initiatives
Pre-concepting
Concepting
Product development
Launch
In-market
End-of-life
Decarbonizing our packaging
47%
lower carbon
emissions
79
%
lower carbon
emissions
Jabra Elite 65t
Jabra Elite 10
All new hearing products sold
from the end of 2024 onwards
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• For our video products, the use phase accounts for a significant
proportion of the total footprint, meaning energy efficiency is an
effective decarbonization lever for this product category
• Though the impact differs across product categories, we expect
that substitution of virgin plastics and metals to recycled alterna-
tives will reduce emissions across our product portfolio substan-
tially
• Across our product categories, transportation contributes consider-
ably to the footprint, meaning that our transition towards ocean
freight will result in lower product carbon footprints in the future
Our LCAs are conducted in accordance with the ISO 14044:2006 and
ISO 14067:2018 standards. Our input data includes: bills of material;
supplier energy consumption; transport distance to London, UK (the
use case location); product power consumption or battery capacity; the
UK grid emission factor, and end-of-life data from our partners under
the WEEE Directive. Our LCAs are externally verified by Bureau Veritas.
More details on our LCAs can be found on our brand websites.
In 2024, we will expand our LCA coverage to more categories in our
product portfolio and build our capacity to model the impact of design
choices on product carbon footprints.
Moving away from virgin materials
We will continue to move away from virgin materials to achieve both
our decarbonization and circularity ambitions. We focus on plastics and
metals, as these are the most widely used non-electronic components
in our products for which non-virgin alternatives exist at scale.
In 2023, we launched nine Jabra products containing recycled plastic.
In 2024, we will expand our portfolio of products with recycled plastics
both through new product developments and in-market changes. We
will also continue to investigate recycled metals and implement where
feasible.
By 2025, we aim to have all our new products (where feasible) to con-
tain at least 50% non-virgin material (measured as % of total weight of
mechanical parts).
Taking the next step in sustainable packaging
Our 2025 goal is for all our packaging to be FSC certified, as compact
as possible, and only contain plastic when strictly necessary.
In 2023, we continued to make progress towards this goal with 62% of
our newly launched products in 2023 already meeting our 2025 sus-
tainable packaging target. We expect all other new packaging across
our product portfolio to meet the same standards ahead of the target
date. In addition to making FSC certified packaging a product require-
ment, we are also working to transition existing products where possi-
ble, and in 2023 we achieved this for 17 SteelSeries product lines.
In addition to these minimum requirements, we constantly look for
ways to reduce the carbon footprint of our packaging by adopting low
carbon materials and paints, as well as innovative solutions to further
reduce material usage. We use LCAs to track the carbon impact of
these changes to our packaging. For our hearing products, our LCAs
show that our new packaging has 47% lower carbon emissions than the
previous version, while for the Jabra Evolve2 packaging we have
achieved 84% carbon reduction since 2018.
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Life-cycle assessments
Plastics1
Metals
2
Electronic components
3
Printed circuit board4
Manufacturing energy5
Packaging6
Transport7
Usage8
Other (foams and EoL)9
2.2%
~0.0%
4.1%
7.6%
19.9%
1.8%
27.0%
34.5%
2.9%
1.5%
3.6%
28.5%
2.1%
17.1%
0.9%
42.3%
0.0%
3.9%
8.7%
5.5%
5.6%
15.5%
16.0%
4.2%
42.9%
1.0%
0.6%
13.5%
5.0%
15.4%
16.9%
1.8%
1.9%
41.6%
0.9%
2.8%
ReSound OMNIA
(rechargeable
battery)
ReSound OMNIA
(disposable
battery)
Jabra Evolve2
65 Flex
SteelSeries
Arctis Nova 7
ReSound
OMNIA (r)
ReSound
OMNIA (d)
Jabra
Evolve2
65 Flex
SteelSeries
Arctis
Nova 7
3
1
kg CO2eq
4
1
2
3
5
6
7
8
kg CO2
eq
10.94
8.93
kg CO2eq
12.62
kg CO2eq
7
.86
1
2
3
4
5
6
7
8 9
3
4
5
7
9
4
5
6
8
9
9
1
7
2
6
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Our circularity agenda focuses on
ensuring that we maximize the value we
extract from every resource we use
Our double materiality assessment (page 25) and life-cycle
assessments (page 30) show that across our value chain the most
significant environmental impacts are a consequence of the winning of
raw materials for our products.
To decouple the growth of our company from negative environmental
impact, the key challenge, therefore, is to reduce dependency on virgin
materials, while avoiding our products end up as electronic waste in
landfill or are incinerated unnecessarily.
In 2024, we will develop clearer metrics to set targets and track our
progress in circularity, aligned with the requirements set out in the
relevant standard of EU’s new ESG reporting directive (CSRD).
Circularity
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Content
Content
Product design
4
5
6
Sourcing
Manufacturing
Distribution
Sales
Product use
End-of-life
1
2
3
Circularity initiatives across our value chain
Circular design
Design is the key enabler for circularity. Design for repair and
disassembly is a key element in our sustainability requirements
(see pages 29-30).
1
Circular materials
We are rapidly increasing our use of non-virgin materials in
new products, launching nine products in 2023 containing re-
cycled plastic (see page 30).
2
Low-waste manufacturing
Among other initiatives to reduce manufacturing waste, in
2023, we reduced the use of IPA, which is a hazardous form of
alcohol used in the washing process for production.
3
Recycling
To comply with product recycling legislation, we finance recy-
cling infrastructure according to the EU WEEE directive in EU
markets. In the U.S. states where our products are covered by
Extended Producer Responsibility legislation, we established a
partnership with ERI in 2023 to enable users to send their
products in for recycling.
4
Repair, takeback, and refurbishment
GN offers return and repair for selected products as well as a
‘screen and clean’ scheme, where unsold or returned products
are tested and repacked for resell. For out-of-warranty prod-
ucts, we will in 2024 launch additional repair and takeback of-
ferings in relevant markets for our video and audio products.
5
Device-as-a-service
In 2023, we launched a global device-as-a-service offering for
our enterprise customers, with a built-in free-of-charge take-
back option, enabling us to give products a second life at the
end of the contract.
6
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In 2023, we made significant investments in developing our supply
chain management systems to support the delivery of our sustainabil-
ity strategy and mitigate material supply chain risks.
Understanding supplier ESG performance is an essential part of deliver-
ing on our sustainability strategy, and our sourcing team has integrated
this into their processes throughout the year.
First, to measure overall ESG performance, we commenced the imple-
mentation of the EcoVadis supply chain data platform. We are in the
process of engaging with our key suppliers to onboard them so we can
begin requesting data through the platform. This process will provide
us with timely and standardized supplier performance data so that we
can monitor, measure, and manage this more proactively and transpar-
ently.
Second, in the area of decarbonization, we have started collecting data
from all tier 1 and selected tier 2 suppliers, starting with a range of en-
vironmental data, including carbon metrics and targets. The data ob-
tained through this process provided a baseline on the environmental
performance, ambition level and climate maturity of our key suppliers,
as well as providing important input data for our product LCAs (see
page 30).
Sourcing in support of our sustainability agenda
Beyond applying sustainability standards across all suppliers, we also
have sustainability strategies for relevant sourcing categories.
Mechanics and packaging: Achieving our 2025 targets for sustainable
materials and packaging (see page 23) requires that we establish solid
supply of recycled, renewable and/or bio-based alternatives, which is a
priority in our mechanics sourcing. In 2023, we launched our first nine
products containing recycled plastic. For packaging, we prioritize
working with suppliers that can provide FSC certified paper and card-
board. To further decarbonize our packaging, we also select suppliers
capable of providing local sourcing of raw materials and customization
close to the customer.
Acoustics: The production of speakers currently relies heavily on neo-
dymium, a rare element for which demand is expected to exceed sup-
ply. We have started the process of engaging with suppliers providing
alternative solutions, such as recycled neodymium.
Batteries: The transition to a low carbon society requires a solution to
potential scarcity of raw materials for batteries. Aside from enabling
battery recycling by designing for repair and disassembly, we also seek
to source recycled batteries in the future if these become available at
scale.
Indirect procurement: Achieving our target to aggressively reduce our
scope 1 and 2 carbon emissions requires that we engage with suppliers
able to offer renewable energy. In other areas of indirect procurement,
such as building renovation, furniture, and IT, we consider sustainability
as a key consideration in supplier selection.
Sourcing
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Safeguarding human rights 34
People and culture drive performance 35
Supporting communities 37
Social
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GN expanded the very successful ReSound
OMNIA portfolio to offer a full range of pop-
ular styles, including BTE and custom-made
styles as well as GN’s smallest rechargeable
hearing aid yet, the miniRIE, allowing more
people than ever to benefit from technology
which addresses the No.1 hearing aid chal-
lenge: hearing speech in noise.
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GN is committed to safeguarding human rights across our supply chain.
The double materiality assessment (see page 25) confirmed that there
are material human rights-related risks in our supply chain in relation to
workers in our value chain and affected communities, particularly in re-
lation to extractive and manufacturing industries.
Due to the nature of our products and industry and the location of
manufacturing sites, we assess potential human rights-related risks in
this part of our supply chain to be mostly in the areas of working condi-
tions, occupational health and safety, and excessive overtime hours.
We are committed to ensuring that human rights are safeguarded
throughout our value chain. This commitment is anchored in our
Sup-
plier Code of Conduct, updated in 2023 to align with industry best prac-
tices set out by the Responsible Business Alliance (RBA). Beyond that,
we have more specific human rights due diligence processes where re-
quired.
Conflict minerals
A
t the first stage of our value chain, we depend on mining of minerals.
As stipulated in our Conflict Minerals Policy, GN will not use minerals
from mines controlled by military groups in conflict regions. Failure to
comply with our policy can ultimately lead to GN discontinuing to use a
supplier.
GN requires suppliers to exclude conflict minerals from GN products,
encourages suppliers to move to externally certified smelters and refin-
ers, and requires suppliers to comply with our Code of Conduct.
GN uses the due diligence guidance laid out by OECD for establishing a
due diligence process.
In 2023, GN received the requested information from all relevant sup-
pliers. For cobalt, we received the requested information from all rele-
vant suppliers, using cobalt reporting templates (CRTs).
Occupational health and safety
The safety, health, and wellbeing of our employees and supply chain
workers is a top priority for us. In our own operations, rigorous occupa-
tional health and safety processes are in place across our main manu-
facturing sites, including training, incident reporting, and tracking of
key metrics. All our major manufacturing sites are ISO45001 certified.
This year we also expanded our Lost Time Incident (LTI) reporting pro-
cesses to include our warehousing sites in addition to our manufactur-
ing sites. In 2023, there have been 3 incidents leading to lost time at
our manufacturing sites, all as a consequence of minor injuries.
Forced labor
A human rights risk that exists across our supply chain is forced labor.
In 2023, we set up a forced labor taskforce to ensure we do not depend
on forced labor in our supply chain. Through this taskforce we will also
ensure compliance with the U.S.’ Uyghur Forced Labor Prevention Act and
future similar legislation.
Supplier audits
All tier 1 contract manufacturers are audited every year, tier 2 suppliers
every second year. For our hearing aid suppliers, we audit tier 1 and tier
2 suppliers based on supplier classification and historical performance.
Audits are based on the UN Global Compact principles of responsible
business and the SA8000 standard, which addresses the key human
rights risks. In practice, during an audit, workers are randomly selected
for an interview and an assessment to ensure their working hours,
treatment by superiors, safety, and salary are compliant with our
standards and local legislation. We require major audit findings to be
addressed through corrective actions.
61 audits were conducted among GN. The major human rights related
findings are grouped into four overall areas (see graphic). All major
findings have either been resolved or are currently subject to manda-
tory corrective action.
Next steps
In 2024, we will perform a human rights impact assessment in line with
the UN Guiding Principles to enhance our ability to identify, measure,
monitor, and remediate our salient human rights impacts, and prepare
for compliance with the upcoming Corporate Sustainability Reporting
Directive and Corporate Sustainability Due Diligence Directive.
Safeguarding human rights
Occupational health and safety: 12 findings
Overuse of dispatched workers: 4 findings
Excessive overtime: 13 findings
Inadequate parental leave: 6
findings
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Building a diverse organization with an
inclusive culture is the right thing to do –
and improves performance
Diversity, equity, and inclusion are strategic priorities
GN fundamentally believes that diverse leadership and organization
are key to success as an innovation leader and, thus, we welcome dif-
ferences. To stay relevant as a business we need access to all employ-
ees’ competencies, creativity, engagement, and loyalty. We need the
best talents, and we need diverse talents. Therefore, diversity, equity,
and inclusion (DEI) are a strategic priority for GN.
GN’s policy for advancing the underrepresented gender is prepared in
accordance with Section 139c of the Danish Companies Act and sets
out GN’s policy for increasing gender diversity in Senior Management
levels, including initiatives within employer branding, recruitment, in-
clusive talent review and succession planning, and leadership accounta-
bility with the aim to translate the policy into action. GN’s activities to
advance gender diversity and reach its gender diversity target as car-
ried out in accordance with the policy and in general are described in
the following.
GN sets inclusion first as a prerequisite for diversity
We aspire to be a human-centered business that places people at the
front and center of everything it does. By connecting compassionately
with customers, partners, and colleagues we aim to foster strong and
meaningful relationships and better and more inclusive experiences for
everybody we touch. Aligned with our company values, we listen to
what everyone has to say, challenge the status quo and strive to trans-
form the world by creating a more equal, inclusive, and understanding
workplace.
In 2023, we continued our journey towards a more diverse and inclusive
organization. With active executive leadership engagement, our DEI
Executive Committee identified the overall purpose and ambition for
DEI as well as necessary strategic initiatives to make improvements.
Further, a series of workshops were held, both to educate and to initi-
ate concrete actions to continue to improve, while recognizing that it is
challenging to obtain diversity, equity, and inclusion in a global organi-
zation.
Advancing diversity and equity through inclusive recruitment
In our commitment to foster a diverse and inclusive workplace, we rec-
ognize the pivotal role that recruitment plays in shaping the composi-
tion of our teams. Inclusive recruitment is not merely a goal but a fun-
damental value that guides our hiring practices.
Making sure that GN’s talent attraction practice is inclusive and equita-
ble is a strategic DEI priority with a clear link to ensuring a level playing
field and fairness for all. Consequently, in 2023 an analysis of our re-
cruitment practice was conducted to identify pivotal gaps. The gaps
identified have been closed with relevant tools that – from a DEI per-
spective – will improve the global recruitment practice and bring our
approach on par with best practice inclusive recruitment.
The following initiatives have been implemented:
• Hiring manager support: guidance to avoid biases in the candidate
screening and interview process
• Standardized job ads: including template to promote inclusive
language
• Search partner alignment: on diversity as well as extending the
support to hiring managers working with search partners
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Age distribution of employees
7,165
employees globally
(-10% compared
to 2022)
49%
Women in
new hires
46%
Women in
workforce
36%
Women
managers
22%
Women in
senior
management
≤ 22 years 22 – 37 years 38 - 53 years 54+ years
2% 42% 42
%
14%
50+
nationalities in
headquarter alone
1,369
new colleagues on-
boarded during 2023
40+
countries where GN
has own staﬀ located
Participation rate in GN’s latest employee
engagement survey
88%
Engagement score on a 10-scale score, which is
0.5 points above industry benchmark
8.2
Employee Net Promoter Score, demonstrating
high employee engagement, which is a corner -
stone in GN’s vision to be a great place to work
51
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Inclusive leadership training
Inclusive leadership is about creating a trusting, open, and respectful
culture in the team as a prerequisite for unlocking the team's creative
potential arising from their differences. In 2023, we have commenced
the design of development journeys for different target groups across
GN. This work will continue into 2024 based on the new one-company
organizational structure with workshops on inclusive leadership and
psychological safety as well as webinars for people managers on DEI
and inclusive leadership.
Leveraging insights from Employee Resource Groups
GN also continued to support employee-led Employee Resource
Groups (ERGs) to further underline that we want our company to be a
place that brings out the best in all people and enables them to reach
their potential. Our current ERGs – Black@GN, WomensNet-
work@GN, and Pride@GN – are part of this work.
Equal playing field for all
Creating an equal playing field is a cornerstone to instill fair and just
practices and policies that ensure all employees can thrive, be them-
selves, and exercise their full potential. To become a truly equitable
employer, we embed inclusion and diversity in our people processes.
As a company, we do not tolerate discrimination or harassment of any
kind based on racial or ethnic characteristics, gender, religion, age, sex-
ual orientation, disabilities, or any other classification as stated in GN's
Ethics Guide.
Strengthening a diverse leadership pipeline and talent development
As we embark on the journey of cultivating a more diverse leadership
pipeline, we recognize it not only as a reflection of our values but as a
strategic imperative that propels us toward a future of sustained
growth, resilience, and innovation.
By ensuring a profound talent practice, GN can use talent reviews as a
strategic tool to identify and develop a diverse pool of talented individ-
uals, including more of the underrepresented gender, and fostering a
culture of equity and inclusion.
GN yearly conducts a global Talent Review and Succession planning
process to ensure that a bigger part of the organization is calibrated to
build stronger diverse talent and leadership pipelines at more levels.
GN’s strategy calls for a still broader range of leadership competencies
and capabilities, why an increased focus aims to ensure that leadership
talents have the right qualifications to efficiently lead a business.
GN wants to use talent development to build a strong, diverse talent
pool across the Group. Consequently, more effort is put into strength-
ening development plans for senior leaders, and a major lever to sup-
port this is “Transform”, an individual and data-driven Talent Develop-
ment Centre to drive senior leadership development. In 2023, 68% of
our Transform talents are female leaders compared to 47% in 2022.
The Transform cohort consist of 12 different nationalities.
Gender diversity at Board and Management level
The percentages as of December 31, 2023, of the underrepresented
gender and the set targets for GN’s Board and Management are re-
flected in the table below. As of October 1, 2023, GN changed its gov-
ernance structure including management levels, why 2023 percentages
cannot meaningfully be compared to previous years. By the end of
2023, the gender composition of GN’s first three management levels
were as follows:
Diversity in leadership levels
2023
1 - Board of Directors
Total number (elected by General Meeting)
4
Underrepresented gender (%)
50
Target (%)*
N/A
Target year
N/A
2 - Senior Leadership**
Total number
18
Underrepresented gender (%)
17
Target (%)
25
Target year
2025
3 - Other Senior Management***
Total number
341
Underrepresented gender (%)
22
Target (%)
25
Target year
2025
* The target for the Board of Directors
is to have 40% of the underrepresented gender
among members elected by the General Meeting
which has been surpassed
with 2 men and
2
women elected
** Senior Leadership (as defined in section 139 (c) of the Danish Companies Act) comprises
the Executive Management, the Executive Leadership Team, and other managers reporting
directly to Executive Management. For historical reasons, these
managers are formally em-
ployed in different GN legal entities, but constitute the actual management structure in
GN’s new one
-company setup. The set target has not yet been met
why activities described
on these pages are maintained to cont
inue to make progress.
*** To better reflect GN’s managerial talent pipeline, GN has chosen to also report on its
broader senior management as defined by GN’s job grades
. The set target has not yet been
met why activities described on these pages are maintained to continue to make progress.
Additional relevant documents
GN’s Ethics Guide is available in 10 languages: www.gn.com/re-
sponsibilitydocuments
GN’s Diversity, Equity, and Inclusion policy: www.gn.com/diversi-
typolicy
In 2023
, 68% of our “Transform”
talents are female leaders…
and
12 different nationalities
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Bringing people closer through clever
engineering is in our DNA
We work every day to bring people closer, and we take great pride in
the results that our efforts provide for people. Helping people with
hearing loss live their lives to the fullest extent possible through great
technology.
More than 10 million people have already received help
It is our goal to help 10 million people with hearing loss by 2025, and
we already reached that milestone. By the end of 2023, we estimate
that we are helping 10.5 million people with hearing loss live healthier
and happier lives. This number is calculated using sales volumes of GN
hearing aids and assumptions based on EHIMA figures for binaural
treatment and replacement rates (five years for high-income countries
and eight years for low-income countries).
Beyond that, we try to help as many people as we can through access,
awareness, and advocacy:
Access
We drive several initiatives to improve access to hearing health. First,
by introducing new product categories with a lower threshold to enjoy-
ing the benefits of hearing health. Our over-the-counter hearing aids
for mild to moderate hearing loss are sold without the need to visit a
hearing care professional.
Second, we seek to help people with hearing loss without direct access
to hearing health due to their circumstances.
During a one-week trip to Poland, GN employees were able to fit
around 80 hearing aids for Ukrainian refugees.
Through different charitable campaigns globally, we donated a further
1,048 ReSound hearing aids.
The Beltone Hearing Care Foundation is a charitable organization on a
mission to help individuals in need of hearing assistance, who may face
financial barriers. We believe that everyone deserves the chance to
hear and engage with the world around them. In 2023, the Beltone
Hearing Care Foundation donated an estimated 900 hearing aids,
bringing the gift of sound to 440 people with hearing loss. These num-
bers represent the tangible impact we strive to achieve, one person at
a time.
Awareness
We seek to increase awareness of hearing health through our efforts to
break down the stigma around hearing loss and by campaigning for the
benefits of early treatment. Our annual campaign called The Gift of
Hearing runs during Thanksgiving each year. When a healthcare pro-
fessional participates in the campaign, they are gifted a hearing aid
that they can fit free of charge for someone who needs it.
Advocacy
Advocacy around hearing loss is closely linked to the work we do on
awareness. In 2023, GN partnered with Soundly, a consumer education
resource for hearing wellness, to present Inside the Ear. A digital art
campaign aimed at demystifying hearing loss and empowering individ-
uals to make informed decisions about their hearing health. Through a
series of fascinating and educational videos illustrating the complex in-
ner workings of the ear, our mission is to cultivate education surround-
ing the crucial significance of maintaining optimal hearing health.
In addition, the GN Foundation, founded by GN in 1956, provides
grants to support a range of scientific, technical, non-profit and hu-
mane purposes (see more at gnfoundation.dk
).
Supporting communities
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Shareholder information 39
Risk management 41
Business ethics governance 45
Data privacy, security, and ethics 46
Corporate governance 47
Board of Directors 50
Executive Leadership Team 52
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G
overnance
Jabra’s most advanced earbuds ever
mark the brand’s leadership in pre-
mium true wireless. The Jabra Elite
10 are the new top tier earbuds opti-
mized for Dolby Atmos with Dolby
Head Tracking, engineered for all-day
comfort and crystal clear calls.
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Through an open and active dialogue,
GN strives to provide all stakeholders
with timely and relevant information
The GN share
The total market value of GN’s shares, excluding treasury shares, was
DKK 25 billion at the end of 2023. The price of the GN share was DKK
171.8 on December 31, 2023, which is equivalent to an increase of 8%
compared to the end of 2022.
GN is, among other indices, included in the C25 index and Large Cap in-
dex on Nasdaq Copenhagen, as well as the Stoxx Europe 600 index and
the Stoxx Europe Sustainability index.
Ownership
The GN share is 100% free float, and the company has no dominant
shareholders. GN has approximately 60,000 registered shareholders
where around 35% of shareholders are located in Denmark, around
45% in rest of Europe, around 20% in North America, and less than 1%
in Rest of World.
The 10 largest registered shareholders held in total around 35% of the
GN share capital at the end of 2023 (including GN’s holding of treasury
shares). By the end of 2023, one shareholder, William Demant Invest
A/S, has reported an ownership interest in excess of 10% of GN’s share
capital.
Share capital and voting rights
GN’s share capital of DKK 603,650,860 consists of 150,912,715 shares,
each carrying four votes. GN has one share class with no restrictions on
ownership or voting rights.
Treasury shares
On December 31, 2023, GN held 5.3 million treasury shares corre-
sponding to 3.5% of the share capital, and the value of the treasury
shares was DKK 911 million.
Until the Annual General Meeting on March 13, 2024, the Board of Di-
rectors is authorized to acquire shares in GN. The company's holding of
treasury shares may at no time exceed 15% of the share capital of the
company.
Dividend policy and share buyback programs
GN’s overall financial target is to deliver a competitive shareholder re-
turn through a combination of dividend payments and share price ap-
preciation. GN aims to pay out a dividend corresponding to 15 - 25% of
the annual net profit and to distribute additional excess cash to share-
holders through share buyback programs.
Dividend payments and share buybacks are subject to, among other,
cash requirements to support the ongoing operations, strategic oppor-
tunities, and the company’s capital structure. Given the current adj. lev-
erage of 4.5x, GN prioritizes to reduce the leverage until it is back at
the long-term target of 2.0x. As a result. GN will not pay out dividend in
respect of the financial year 2023 and share buyback programs have
been paused for the time being.
Shareholder information
Geographical split of shareholders (% of share capital)
Major indices including GN Store Nord
Index
Focus
OMX C25
Denmark
OMX C20
Denmark
STOXX Europe 600
Europe
OMX Nordic Large Cap
Nordics
STXE Health Care
Europe
Denmark
35%
Europe
45%
North America
20%
Rest of the World
<1%
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As announced previously, GN’s current capital structure policy remains
a long-term target of 1-2x NIBD/EBITDA.
Incentive programs
By the end of 2023, the total number of outstanding
options in GN Store Nord were 4,044,858 (2.7%) of the share capital in
GN Store Nord.
Investor relations policy
As part of GN’s investor relations activities, an active dialogue is pur-
sued with existing and potential shareholders as well as with financial
analysts. GN ensures that relevant and timely information is provided
to the financial community to ensure that the GN share is fairly priced.
This is accomplished through information continually announced to the
market as company announcements and press releases, combined with
investor meetings, conferences and presentations of the company’s in-
terim and annual results.
Following the release of interim and annual results, GN conducts road-
shows where the Executive Management and the Investor Relations
team inform investors and financial analysts about the recent
developments in the company. GN is covered by sell-side analysts, who
continually release analyst research reports on GN and the industry dy-
namics.
GN has a 30-days silent period prior to publication of a financial report.
During these silent periods, any communication with stakeholders is
restricted.
GN’s website, www.gn.com
, contains historic and current information
about GN, including company announcements and press releases,
current and historic share price data, investor presentations, and
annual and interim reports. The Investor Relations team can be
contacted at: Investor@gn.com.
Notices for the Annual General Meeting
GN sends notices to convene Annual General Meetings by email.
Letters are sent to shareholders who have requested this instead of
emails. Thus, GN encourages all registered shareholders to sign up at
the investor portal with their email addresses and check the box la-
belled “subscribe/unsubscribe” in the field “Notice for the Annual
General Meeting”. Shareholders will then receive the notice by email in
the future.
Share price development
* Index: 3
0-12-2022 = 100
Financial calendar for 2024
Event
Date
Annual General Meeting
March 13, 2024
Interim Report Q1 2024
May 2, 2024
Capital Markets Day
May 7
, 2024
Interim Report Q2 2024
August 22, 2024
Interim Report Q3 2024
November 7, 2024
Read company
announcements on www.gn.com.
Additional relevant information
GN’s investor relations policy is available at:
www.gn.com/aboutIR
A full list of the analysts covering GN is available at:
www.gn.com/analysts
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Content
GN manages business, finance, and climate related risks across its busi-
nesses. Its risk management governance structure and processes are
fully aligned with the ISO 31000 standard for enterprise risk manage-
ment.
All value chains, enabling functions, and business management teams
participate in the recurring risk process. The main types of risk associ-
ated with GN’s businesses, and the main risk mitigation taken to man-
age these, are outlined on the following pages.
Risk management
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Q1
Q2
Q4
Q3
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Board of Directors’ risk review.
Board Top Risk Review
Prioritized areas receive automated
risk and maturity questionnaires.
The responses are automatically
calculated into risk likelihood and
risk impact. Hereafter, the results
are evaluated and challenged by the
Corporate Risk Governanceteam
and consolidated in meetings with
managers from prioritized areas.
Initial risk assessment process
Meeting with Executive Leadership
Team who collectively challenges,
validates, and prioritizes risks and
risk handling activities.
Audit Committee reviews
Organization Risk Governance
process.
Board Audit Committee
Risk Governance Review
Executive impact review
Risk identification and mitigation process
Financial review
Meeting with Finance to assess
and validate impact of potential
risks, measured as % of EBITA.
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Geo and macro environment
Characteristics
Inflationary pressures and general economic uncertainty decrease households’
discretionary spending. Similarly, companies faced with increasing input costs and uncertain
demand patterns tighten operational expenses. Even though inflationary pressures have
decreased during the second half of 2023, uncertainties related to the economy continues,
which may result in declining demand for GN’s products.
GN’s supply chains, including component sourcing, remain heavily dependent on availability
of components and manufacturing capacity in China and Asia. Escalating geopolitical
instability and deteriorating trade relations may impact key suppliers and GN’s operations.
And this in turn may impact GN’s ability to continue to supply key markets.
Climate risk
Characteristics
Climate change is projected to increase the frequency, severity, and duration of extreme
weather, impacting communities and economies worldwide. Governments are moving to
mitigate this threat through regulation and investment in innovation. Consumer awareness
of climate issues is also growing rapidly. Consequently, GN faces both climate-related physi-
cal and transitional risks.
Physical risks
Global production of electronic components is concentrated in areas projected to be signifi-
cantly exposed to floods and storms. Climate-related disruption could reduce GN’s produc-
tion capacity, negatively impacting revenues, and possibly incurring costs to cover repair
and contingency plans.
Transitional risks
While GN is not a direct player in carbon-intensive industries, our supply chains begin with
mining activities and require the transportation of goods globally, which has a substantial
climate impact. If GN’s suppliers do not decarbonize at a sufficient rate, GN could be ad-
versely affected by regulation and changing consumer preferences.
The shift towards electrification and digitalization is increasing the demand for critical min-
erals used in GN products. This could increase direct costs in the short to medium term.
Product innovation
Characteristics
GN operates on the cutting edge of technological advances to provide new relevant user
experiences and functionalities to its customers. Any failure to gain access to and deploy
the latest technologies and competencies within hardware and software in a timely manner
would impact GN’s future earnings potential.
In addition to maintaining technological leadership, GN must ensure that products and ser-
vices operate without defects or other quality issues from their launch through their lifecy-
cle. Quality deficiencies could cause significant reputational harm, and ultimately jeopard-
ize GN’s ability to remain a relevant player in key markets.
Mitigating actions
GN’s supply chain teams have undertaken several resilience measures within sourcing
of components, assembly of products and transportation. GN will continue long-term
global sourcing and production diversification efforts in line with the industry in gen-
eral. Long-term, GN will ensure diversified supply chains and mitigate risk of market
access restrictions.
GN continues to invest in current product portfolios and future roadmaps where it
sees high revenue certainty, while maintaining operational readiness to accommodate
future demand. Further, GN focuses on operational expenses, reducing inventory, cash
generation, and maintaining access to necessary funding.
Mitigating actions
GN has set science-based targets to reduce absolute scope 1 and 2 emissions by 80% by
2030 from a 2021 base year, and absolute scope 3 emissions by 25% within the same
timeframe. GN is also committed to reaching net-zero by 2050, at the latest.
GN is integrating assessment and monitoring of climate-related risks – based on transi-
tion scenarios and climate impact analysis – in existing risk management procedures to
enable proactive mitigation of any potential impact.
GN is establishing production capacity across different geographies, as well as innovat-
ing to increase production efficiency and circularity, to mitigate the risks rooted in sup-
ply chain disruption and lack of raw materials or components.
For an overview of GN’s alignment with the Taskforce for Climate-related Financial Dis-
closure (TCFD) guidance for climate action, see page 64.
Mitigating actions
GN continuously updates product roadmaps to remain competitive in all current and
future categories and assesses new categories where GN could have a meaningful im-
pact. GN’s research and development teams remain at the forefront of new technolo-
gies to be harnessed in future product roadmaps.
To gain the required competencies, GN sources engineering and software develop-
ment talent globally.
GN spends significant effort in protecting its intellectual property and ensuring free-
dom to operate in its development efforts.
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Competition and markets
Characteristics
Highly competitive dynamics characterize the product categories in which GN operates.
Products must provide compelling user experiences to compete. GN experiences market
consolidation, product commoditization, and attempts at conquering market share from in-
cumbents and new competitors from adjacent industries.
As purchase decisions within some GN categories potentially migrate from professional
buyers to the end-user, brand awareness becomes increasingly important in defending and
expanding market share.
Compliance
Characteristics
Authorities and customers require compliance with legislative and regulatory regimes and
standards. Failure to explicitly fulfil such requirements could compromise GN’s license to
operate and risk irreversible loss of customer confidence, effectively giving up large mar-
kets to competitors.
IT and data
Characteristics
IT and data are foundational business enablers for GN across all value chain components.
All platforms are required to be available and provide the functionalities needed. Addition-
ally, systems must protect data and privacy.
Increasing cyber-attacks threaten the availability of business critical systems and could re-
sult in data breaches. With the increasing amount of software embedded in GN devices or
its services, and the interconnectedness with customer systems, GN devices or services
could become vehicles for “supply chain cyber-attacks” at customer organizations where
malicious code within GN’s software could compromise the customers’ cyber defenses.
Poor availability, consequences of cyber-attacks, lack of functionality in business-critical
systems, or data breaches could impact GN’s operations and reputation and may result in
significant fines and financial loss.
Mitigating actions
GN continues to build relationships and robust interfaces with its B2B channels.
Direct-to-consumer sales of hearing aids remain a small business for GN, but long-term
focus on this segment remains a priority as GN believes this to be a future growth op-
portunity to compete in the newly opened U.S. over-the-counter market.
Mitigating actions
GN is dedicated to responsible and ethical business practices and does its utmost to
safeguard its businesses and protect the safety and privacy of customers.
To ensure robust and accountable ongoing compliance, GN maintains several corporate
functions to monitor current and emerging requirements and map vulnerabilities and
compliance gaps in case of future requirements.
Mitigating actions
GN pursues a cloud-migration strategy for its business applications to achieve more re-
silience and security. It also invests in core enterprise resource planning and e-commerce
platforms to serve current business needs and accommodate likely future needs.
GN cyber defenses evolve to accommodate the ever-changing threat profiles and fulfil
the requirements in network information security regulations and other information se-
curity certification frameworks. Also, GN is assessing the vulnerability for “supply chain
attacks” to identify any gaps and devise relevant remedial actions.
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Transformation to a one-company setup
Characteristics
GN’s decision to bring its previously independently managed business entities together in a
one-company setup is critical to GN’s efforts to reorganize the company to operate in sim-
pler, faster, and more impactful manner, ensuring efficient and optimal use of resources in
an increasingly competitive environment. The initial assessment is that the transformation
will allow GN to reap significant benefits. The transformation will require strong leadership,
change management, and commitment throughout the organization. The transformation is
progressing well, but GN still has risks related to realizing all the planned and expected syn-
ergies from a full and successful integration.
Financial risk
Characteristics
Due to the nature of its operations, investments, and financing activities, GN is exposed to a
number of financial risks. GN has centralized the handling of these financial risks in Group
Treasury except for commercial risks, which are managed by the Group’s operating busi-
nesses (divisions).
The financial risks are managed in accordance with the overall financial risk management
guidelines set out in GN’s Group Treasury Policy, which is reviewed on an ongoing basis.
GN’s net interest-bearing debt decreased during 2023 to DKK 10,567 million (2022: DKK
14,561 million). As a result, the net interest-bearing debt to EBITDA ratio ended at 6.0x
(2022: 7.1x) driven by the execution of the group’s capital plan and strong cash flow gener-
ation.
GN’s loans and bonds are primarily long-term with maturities until 2036 with mostly fixed
interest rates.
Annual EBITA impact from a 5% increase in currency before hedging
(DKK million)
Currency
GN Store Nord
USD
-50
GBP
35
JPY
15
AUD
12
Mitigating actions
GN has set up an Integration Management Office with experienced internal resources
and supported by external advisory consultants to assist GN’s Executive Leadership
Team in the transformation. This includes significant efforts to ensure genuine buy-in
from the organization, design of the future-state organization, and assigned ownership
of processes and tasks. The Integration Management Office ensures close control and
follow-up on deliverables and deadlines.
Mitigating actions
GN has hedged a substantial part of the expected net EBITA in foreign currencies to se-
cure the EBITA contribution of the material trading currencies for the next 12 months
across both GN Hearing and GN Audio. GN is also monitoring the combined impact of
minor trading currencies and hedges those on a case-by-case basis.
On September 27, 2023, GN has entered into a three-year EUR 800 million term loan
with its commercial banking group to refinance its short-term funding requirements in-
cluding EUR 220 million EMTN bond, EUR 330 million Convertible Bond, and EUR 600
million EMTN Bond.
GN has short-term, uncommitted Money Market lines and Overdraft facilities in place to
diversify its borrowing instruments and manage working capital. The total size is EUR
442 million, with a utilization of EUR 214 million on December 31, 2023.
GN also has a short-term, uncommitted Euro Commercial Paper program (“ECP”) in
place to diversify its borrowing instruments. The program size is up to EUR 250 million,
with a utilization of EUR 32 million on December 31, 2023.
In total, GN has outstanding senior unsecured bonds and Private Placements of around
EUR 695 million in aggregate under the EMTN program by December 31, 2023, with ma-
turities from 2023 to 2036. Moreover, GN currently has R&D loans outstanding of EUR
310 million with maturities from 1 to 7 years with fixed interest rates.
To mitigate potential liquidity or refinancing risks, GN has access to a Revolving Credit
Facility of EUR 520 million, which was undrawn as of December 31, 2023.
Please refer to note 4.2 in the financial statements for further information about finan-
cial risks.
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Policy management and compliance training
GN continues its commitment to doing things the right way, complying
with relevant international regulations. This work is anchored in our
Code of Conduct, the GN Ethics Guide, our anti-corruption policies, our
Supplier Code of Conduct and other policies and guidelines. These out-
line the fundamental requirements for how GN operates and describe
the responsibilities and ethical standards expected of all employees
and relevant business partners and offers support and guidance for em-
ployees in case they require help in ensuring GN’s high standards.
To ensure and document that employees are familiar with the GN Eth-
ics Guide and other key policies, employees are annually required to
sign off on complying with GN policies within specific areas. Likewise,
employees annually complete GN’s e-learning courses within key topics
such as anti-corruption, information security, data security, and compe-
tition compliance. Every year, this is supplemented with tailored com-
pliance training for selected business areas and employees, live train-
ings conducted based on risk assessment and on request.
Anti-corruption compliance reviews
As part of GN’s anti-corruption compliance program, on-site reviews of
selected GN business areas are conducted to identify and assess
relevant risk areas, to review whether adequate controls are in place to
ensure compliance, and to assist with corrective actions where re-
quired. The selection of business areas for compliance reviews is based
on an annual country and market risk assessment based on a set of pre-
defined risk indicators. In 2023, four compliance reviews were con-
ducted in tight cooperation between various functions within the or-
ganization.
Third-party due diligence
In 2023, GN continued the granular roll-out of the third-party due dili-
gence screening program for assessing and managing corruption, sanc-
tions, and supply chain risks associated with third-party business part-
ners. This involves questionnaires and screenings focusing on the po-
tential reputational and legal risks and a thorough check of beneficial
owners to ensure GN is at no risk of violating international sanctions re-
gimes. GN is focused on ensuring that no partners violate international
sanctions and that all partners understand and comply with GN’s posi-
tions in the area.
Whistleblower system
GN’s whistleblower hotline, the GN Alertline, is independently man-
aged by a third party. All investigations are managed internally by
trusted GN employees. The hotline can be used by employees as well
as external parties to report concerns and experienced or perceived
misconduct. This is an important tool for ensuring that alleged illegal
or unethical conduct is reported and immediately addressed. All com-
plaints are treated with the required confidentiality, and GN is commit-
ted to deal with any employee who takes action and/or participates in
an investigation in a fair and respectful manner. This is emphasized in
GN’s non-retaliation policy. GN ensures that our policies and systems
are fully compliant with all local and international regulatory require-
ments on whistleblower systems. In 2023, GN updated the setup to
comply with the final implementation if the EU Whistleblower
directive.
Business ethics governance
Content
Additional relevant information
GN’s Codes of Conduct and policies:
www.gn.com/responsibilitydocuments
Reporting and additional details on GN’s whistleblower hotline:
www.gn.com/alertline
More details on GN’s compliance efforts and policies at
www.gn.com/documents
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Policy management and
compliance training
GN whistleblower system
29
Reported cases were mainly related to harassment, bullying, inappropriate behavior,
conﬂicts of interest, fraud, violation of confidentiality, and misappropriation of
information. All cases have been properly investigated, and appropriate actions,
including disciplinary actions, have been taken.
28
countries where GN’s
whistleblower system is
available
24
diﬀerent languages
that GN’s whistleblower
system accommodates
concerns reported
through GN’s
whistleblower system
12
of the reported cases
were considered
substantial
To support online training, GN continues to emphasize
the value of live training sessions to supplement and
add to the online training
A comprehensive mandatory Anti -Harassment
Awareness Training was delivered to all GN employees
in Q4 2023
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Data privacy
GN is committed to protecting the personal data entrusted to us by
customers, partners, users, and employees.
In 2023, we have further refined the processes surrounding our digital
systems in compliance with the principles of EU’s General Data Protec-
tion Regulation (GDPR) and the China Personal Information Protection
Law (PIPL). Further, we are continuously implementing processes and
solutions that meet the increasing global data privacy regulatory de-
mands.
Our internal awareness training facilitates mandatory data privacy e-
learning, and we are applying internal data privacy review to ensure
continual compliance and awareness.
In 2024, GN will continue to strengthen our data protection posture to
provide excellent, secure, and trustworthy solutions.
Information security
GN is committed to ensuring a high level of cyber security in our infra-
structure, products and services, and adherence to legislation across
the entire organization. Information security management systems are
in place based on ISO 27000. In addition, we have Information Security
Policies in place with training materials, and all training is conducted
annually for all employees. The information security management sys-
tem is being reviewed and approved on an annual basis by the Board of
Directors and Executive Management.
We ensure continuous IT Security monitoring through our Security Op-
erations Center. This enables us to discover and disable threats early
and keep our organization safe. Equally, security by design is pivotal in
our products lifecycles and services.
Data ethics
GN uses data for various purposes, which entail benefits for GN and its
customers. GN is committed to act ethically responsible with data and
comply with ethical principles. By actively considering data ethics, GN
intends to ensure human dignity, equality, fairness, responsible use of
data, transparency, and awareness by minimizing risk of algorithm bias
and discrimination, lack of transparency, lack of control, and lack of re-
sponsibility and accountability.
GN is implementing appropriate organizational and technical security
measures to ensure that any use of data happens in a safe and secure
manner. GN will periodically review the contents of GN data ethics tak-
ing into consideration input from employees and partners, develop-
ment in trends, technology, legislation, and ethical data values.
Data privacy, security, and ethics
Content
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Additional relevant information
GN’s data privacy policy:
www.gn.com/privacy-policy
GN’s Data Ethics Policy:
www.gn.com/dataethicspolicy
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Management structure
GN is governed by a two-tier management structure. The Board of Di-
rectors is responsible for the overall governance of the company, and
the Executive Management handles the daily management of the com-
pany’s affairs under the guidelines and supervision of the Board. The
ultimate authority rests with the shareholders in the General Meeting.
On September 4, 2023, GN announced that its Board of Directors had
decided to execute the next step of integration and transition into a
more streamlined one-company setup with one Group Chief Executive
Officer and one Group Chief Financial Officer, simplifying the Group's
governance structure. The changes to the Executive Management took
effect from October 1, 2023.
As a consequence thereof, as from January 2024, board members
elected by the Annual General Meeting of GN Store Nord will only
serve as board members of GN Store Nord, and not also as board
members of each of GN Hearing and GN Audio. Going forward, the
Board of Directors in GN Hearing and GN Audio will consist of GN’s
senior management in line with other operational subsidiaries in the
GN Group.
Board of Directors
GN's Board currently comprises seven members, of which four have
been elected by the shareholders at the Annual General Meeting, and
three by the employees in accordance with the Danish Companies Act.
In accordance with GN’s Articles of Association, the Board will be re-
plenished at the next Annual General Meeting so that at least five
members are elected by the shareholders.
Competencies of the Board
GN’s Board strives to recruit members with diverse and complemen-
tary competencies. The current Board is a diverse group in terms of
global experience, functional competencies, and industry background.
The composition is a mix of members with executive positions and pro-
fessional board members, providing a good balance between knowledge,
competencies, experience, and availability for a substantial workload.
The board members possess global expertise within med-tech &
healthcare, ESG, innovation, product development, IT, software, digital
transformation, online marketing, commercialization, technology &
professional services, finance, and change management. See pages 50-
51 for a description of the Directors’ competencies and experience.
The Board of Directors’ annual self-evaluation
In 2023, the Board of Directors performed its annual evaluation of the
Board with the assistance of an external advisor. This is consistent with
the recommendations of the Danish Committee on Corporate Govern-
ance that companies conduct an external, objective evaluation at least
every three years.
The Process
The evaluation was based on the input of eight board members, seven
executives, and two auditors. It encompassed comprehensive personal
interviews, tailored online questionnaires, a mapping of the board com-
position, board composition benchmarking, and analysis of time spent
during board meetings.
Additionally, various documents were reviewed, including agendas,
board material, and committee charters. Individual board members re-
ceived constructive feedback on their performance and contributions
as part of the evaluation.
Corporate governance
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GN’s framework
for corporate governance
General Meeting
Board of Directors
Board Committees
Executive Management
Executive Leadership Team
The board members of GN are elected at GN’s General Meeting.
The Board of Directors has established Audit, Remuneration, Nomi-
nation and Strategy Committees, and appoints the members of the
Executive Management. In addition, GN has established an Execu-
tive Leadership Team.
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The result of the general board evaluation, including practical recom-
mendations, was discussed at a board meeting in December 2023.
General conclusions
The board members are empowered to express their thoughts and
opinions; they are perceived to be well-prepared and highly committed.
The Board has diverse experiences, personal styles, cultural back-
grounds, and a good gender balance. The Chair is seen as an inclusive
and seasoned professional, well trusted by the management and with a
sincere ambition to do what is right.
As part of the general evaluation conclusions, the external advisor pro-
vided certain recommendations, which the Board intends to take into
consideration going forward.
As the Board has had a year of maneuvering turbulent macroeconomic
and geopolitical times, introducing a new company structure, and re-
cruiting a new CEO and CFO, this has required significant time and ef-
fort spent on tactical topics.
In the future, the Board should and will allocate relatively more time to
long-term strategic questions and continue building an encouraging
and valuable relationship with the (new) management team.
The Chair of the Board will account for the process and the general
conclusions in his statement at the Annual General Meeting.
Additional information on the evaluation process and the
general conclusions of the 2023 evaluation may be found on
the company’s website: www.gn.com/boardevaluation2023
Board committees
As part of the overall governance of the company, the Board has es-
tablished Audit, Nomination, Remuneration, and Strategy committees
to assist with monitoring and preparatory work relating to key areas of
the Board’s responsibilities. The committees’ work in 2023 are summa-
rized below:
Audit Committee
The Audit Committee continued to provide oversight of the financial
reporting process, the audit process, GN’s system of internal controls,
and compliance with laws and regulations.
The committee reviewed the whistleblower reporting system, material
legal cases, main accounting principles, tax strategy and compliance,
risk management processes covering key risks, and monitoring of ESG
targets and reporting thereon. Further, the committee considered the
need for an internal audit function, which was not deemed necessary at
this time.
Remuneration Committee
The Remuneration Committee supervised and reviewed the re-
muneration policy, salary, bonus, long-term incentive process and
results, and assisted with the preparation of the Remuneration Report.
The Committee also considered grants under GN’s long term incentive
program, talent development and succession planning process and
results.
Finally, the Committee reviewed remuneration, incentive plans, and
severance packages for the Executive Management and the new
Executive Leadership Team.
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Report on Corporate Governance cf. section 107b of the
Danish Financial Statements Act
The Board and the Executive Management continuously
strive to maintain a good corporate governance level.
The website of the Committee on Corporate Gov-
ernance - https://corporategovernance.dk/english –
lists its recommended best practice guidelines.
GN is required to report on its compliance with these rec-
omm
endations according to the “comply or explain” prin-
ciple. GN’s compliance with the individual recommenda-
tions is reviewed once a year by the Board.
Download GN’s 2023 Corporate Governance Re-
port: www.gn.com/corporategovernance2023
Risk management related to financial reporting is de-
scribed in this report on page 44. Internal control systems
are described in the above-mentioned Corporate Govern-
ance Report. This constitutes GN’s statutory report on
corporate governance as required under section 107b of
the Danish Financial Statements Act.
GN’s Remuneration Policy is available at
www.gn.com/remunerationpolicy
GN’s Remuneration Report for 2023 is available at:
www.gn.com/remuneration2023
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Nomination Committee
The Nomination Committee focused on ensuring that Board and Exec-
utive Management composition and competencies continue to support
GN sufficiently and in line with GN’s strategy and purpose.
This includes competencies in relation to GN’s transformation to a one-
company structure, extensive succession and recruitment processes to
adequately plan and prepare talent pipeline for Board and Executive
Management positions, while ensuring good culture and sound values
as an integral part of all nominations, appointments, and succession
planning.
The Committee also monitored Board performance and competencies
and conducted a thorough Board assessment with external assistance.
Finally, the current structure and diversity of the Board have been re-
viewed and found to meet relevant governance requirements.
Strategy Committee
The Strategy Committee oversaw a series of existing projects as well as
new projects to explore technological innovations within the broader
technology space. Further, the committee explored the further devel-
opment of collaboration and synergies between GN’s business entities
and support functions.
See charters and composition of the four committees at:
www.gn.com/boardcommittees
Chairmanship
The Chair and the Deputy Chair form the Chairmanship of the Board,
which prepares and organizes the work of the Board and performs pre-
paratory tasks for and advise the Board in relation to strategy, imple-
mentation of strategy, business development, budget, and projects,
and performs in-depth business reviews of selected areas.
Remuneration
GN pursues a policy of offering the Board of Directors and Executive
Management remuneration that is competitive with industry peers and
other global companies to retain and attract competent professional
leaders of the business and members of the Board of Directors.
GN’s Remuneration Policy is available at www.gn.com/remu-
nerationpolicy, and GN’s Remuneration Report for 2023 is
available at: www.gn.com/remuneration2023.
Meeting attendance 2023
Chairmanship
Audit
Committee
Nomination
Committee
Remuneration
Committee
Strategy
Committee
GN Store Nord
A/S Board
GN Hearing A/S
Board
GN Audio A/S
Board
Jukka Pekka Pertola
(C) 16/16
10/10
14/14
(C) 4/4
(C) 22/22
(C) 6/6
(C) 6/6
Klaus Holse
(DC) 9/16*
3/4**
10/10**
3/4**
(DC) 12/22*
(DC) 3/6*
(DC) 3/6*
Hélène Barnekow
4/4
(C) 10/10
(C) 9/14**
(B) 17/22
(B) 6/6
(B) 6/6
Anette Weber
(C) 4/4
9/10**
(B) 22/22
(B) 6/6
(B) 6/6
Leo Larsen
3/4**
(B) 21/22
Cathrin Inge Hansen
(B) 21/22
Claus Holmbeck-Madsen
(B) 21/22
(C) Chairman
(DC) Deputy Chairman
(B) Board member
Please visit
www.gn.com/About/Management for more elaborate descriptions of the Board members’ competencies and management duties.
#/# signifies the number of Board and Committee meetings in which each member has participated followed by the total number o
f Board and Committee meetings.
* Was not a member of the Board for the full year.
** Was not a member of the Committee for the full year.
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Jukka Pekka Pertola
(Chair)
M.Sc.
(Electrical Engineering.)
Professional board member. For-
mer CEO of Siemens A/S
Chair since 2023
Klaus Holse
(Deputy Chair)
M.Sc.
(Computer Science.) Pro-
fessional board member. Former
CEO of SimCorp A/S
Deputy
Chair since 2023
Hélène Barnekow
M.Sc.
(International Business).
Partner, Gaia Leadership. Former
CEO, Microsoft Sweden
Anette Weber
Lic.oec HSG, Finance &
Accounting. Group CFO of
BUCHERER
AG
Chair of the Boards of Tryg A/S*, Tryg Forsikring A/S, Cowi Holding
A/S, and
Siemens Gamesa Renewable Energy A/S.
Member of the Board of Asetek
* A/S.
Committee memberships: Strategy (Chair), Nomination and Remu-
neration (Member); in Tryg A/S: Remuneration (Chair), Nomination
(Chair), and IT
-Data; in COWI Holding A/S: Nomination and Remu-
neration Committee (Chair); in Asetek A/S: Remuneration Commit-
tee (Ch
air).
Broad international background with more than 20 years of man-
agement experience in the ICT, energy, industry, infrastructure,
and healthcare sectors, solid experience with various business
models stretching from B2C to complex project business, IT out-
sourc
ing solutions, technology services, and professional services.
Chair of the Boards of Danish Industry, Macrobond Financial AB,
Vizrt Group AS, EG A/S, and SuperOffice AS. Member of the Boards
of Terma A/S and Zenegy ApS. Committee memberships: Audit
(Member), Nomination (Member), and Strategy (Member).
Broad international background with more than 20 years of man-
agement experience in the IT and software industry and brings to
the company’s Board of Directors a vast experience and insight
into the green agenda and digitalization.
Chair of the Board of Mindler AB. Member of the Boards of Voyado
AB and Handelsbanken AB*.
Committee memberships: Nomina-
tion (Chair), Remuneration (Chair)
, and Audit (Member).
Long international experience, mainly in the technology sector and
in different C
-level positions. Experience ranging from product de-
velopment to sales
and marketing. Managed significant digital
transformations across companies and geographies with focus on
inclusive transformation leadership.
Member of the Supervisory Board of New Work SE*
Committee memberships: Audit (Chair) and Nomination (Mem-
ber), in New Work SE; Audit (
Chair).
Extensive global leadership expertise and knowledge from various
leadership positions in the global healthcare, IT, and luxury retail
industry. In
-depth knowledge of finance, digitalization, develop-
ment, general and change management, platform economies, and
M&A.
Board member since
2020
Board member since
2023
Board member since
2013
Board member since
2020
Term
2023/2024
Term
2023/2024
Term
2023/2024
Term
2023/2024
Considered independent
Yes
Considered independent
Yes
Considered independent
Yes
Considered independent
Yes
Nationality
Finnish
Nationality
Danish
Nationality
Swedish
Nationality
German
Year of birth
1960
Year of birth
1961
Year of birth
1964
Year of birth
1971
* Company listed on a regulated market
Board of Directors
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Leo Larsen
(
Employee-elected member)
M.Sc. (Electrical Engineering)
and a diploma in business admin-
istration and international trade.
Senior Director, Audio Research
Cathrin Inge Hansen
(
Employee-elected member)
B.Sc. (International Marketing),
Graduate Diploma (Business Ad-
ministration & International
Trade), Senior Regulatory Pro-
cess Compliance Specialist
Claus Holmbeck-Madsen
(Employee
-elected member)
Academy Foundation Degree (Busi-
ness). Global Head of Knowledge &
Learning,
Global Customer Experi-
ence
Board & Committee positions
Board member since
Term
Nationality
Year of birth
Member of the Board of the GN
Store Nord Foundation
and of
the Strategy Committee
2007
2022/2026
Danish
1959
Board & Committee positions
Board member since
Term
Nationality
Year of birth
-
2022
2022/2026
Danish
1969
Board & Committee positions
Board member since
Term
Nationality
Year of birth
Member of the Board of the GN
Store Nord Foundation
2022
2022/2026
Danish
1968
Board of Directors
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On September 4, 2023, GN announced that its Board of Directors had
decided to execute the transformation to a more streamlined one-
company setup with one Group Chief Executive Officer and one Group
Chief Financial Officer, simplifying the Group's governance structure.
The changes to the Executive Management and the establishment of
the new Executive Leadership Team, announced on September 28,
2023, took effect from October 1, 2023.
Read more about our Executive Leadership Team and their back-
grounds at https://www.gn.com/About/Management
Peter Karlstromer
Chief Executive Officer (CEO)
(CEO GN Audio as of January 2, 2023, and CEO GN Store
Nord and GN Hearing as of October 1, 2023)
Member since
2023
Year of birth
1971
Member of Executive Management
Peter brings a strong international senior leadership track record, working with multiple
aspects of technology around the world.
Peter holds a M.Sc. Management, Business Administration and
Economics, and a M.Sc.
Electrical and Electronics Engineering from Lund University. Prior to joining GN Peter held
leadership positions with McKinsey & Company, Cisco Systems, and Securitas Group.
Søren Jelert
Chief Financial Officer (CFO)
(as of
June 1, 2023)
Member since
2023
Year of birth
1972
Member of Executive Management
Søren is an internationally experienced finance professional, who contributes with
strong financial and business leadership, building strong teams and solid
relationships
with investors.
Søren graduated with a B
.Sc., M.Sc. Management Accounting from Copenhagen Busi-
ness School. His career spans operational and finance leadership positions with Maersk
Oil & Gas, Novo Nordisk, NNE Pharmaplan, and prior to joining GN as CFO of ALK
-
Abello.
Executive Leadership Team
Ann Fogelgren
Chief Information Officer (CIO)
Joined GN in 2020
Christoph Schmid
Chief R&D Officer
Joined GN in 2021
Pierre Berkmann
Chief People Officer
Joined GN in 2016
Stefan Bergfors
Chief Operations Officer (COO)
Joined GN in 2017
Calum MacDougall
President Enterprise division
(interim)
Joined GN in 2015
Ehtisham Rabbani
President Gaming & Consumer
division
Joined GN in 2022
Scott Davis
President Hearing division
Joined GN in 2019
Trine Finnemann
Chief Strategy & Transformation
Officer
Joined GN in 2019
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ESG accounting processes 54
ESG data – climate related 55
ESG data – other 57
Stakeholder engagement 59
Policy overview and governance 60
EU Taxonomy Regulation disclosure 61
TCFD index 64
Consolidated
ESG
data
GN Store Nord
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Jabra Speak2 - the next generation of
Jabra’s successful professional speak-
erphones features advanced full du-
plex audio, creating natural two-way
conversation, as if everyone speaking
was there in person.
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This report covers the environmental, social, and governance (ESG) is-
sues that are deemed relevant for GN and its stakeholders. Key issues
are identified through ongoing stakeholder engagement and our dou-
ble materiality assessment (see page 25), informed by data-driven
analysis and addressed by programs or action plans with clear and
measurable targets. We use ESG data to support our business and to
disclose relevant and transparent information to our stakeholders. The
accounting policies have been applied consistently for all the years pre-
sented. Any changes to historical data are only made if considered ma-
terial.
Reporting period
All reported data covers the financial year: January 1 to
December 31, 2023.
Baseline
The baseline year for our science-based climate targets is 2021.
Reporting boundaries
Entities included in the reported performance data are GN Store Nord
and its majority-owned subsidiaries following the operational control
approach, which in practice means where GN controls more than 50%
of the voting rights or that GN otherwise controls. If a majority-owned
entity is acquired during the financial year, it will be included in our per-
formance data as soon as possible but not later than the end of the fol-
lowing financial year.
Significant changes to reporting boundary
No material changes were made to the reporting boundary.
Data quality and consolidation
We have processes at market, regional, and global levels governing the
collection, review, and validation of ESG data included in this report.
While we make every effort to capture all information as accurately as
possible, it is neither feasible nor practical to measure all data with ab-
solute certainty. Where we have estimated or exercised judgement,
this is highlighted in the accounting policies and notes.
Environmental data is collected and reported for sites where we have
operational control. The number of sites in scope for data collection in-
creased in 2023, as the reporting threshold of 50 employees was re-
moved. Social data related to our own workforce is collected and re-
ported through our global HR system for all GN employees globally.
All data reported follows these principles unless otherwise stated.
Restatements
We may restate historical data due to structural changes, including
from acquisitions or divestments; improvements in data accuracy and
calculation methodologies; and changes to accounting policies.
We recalculate comparatives if any such changes impact a given metric
by more than 5%. We may also recalculate for changes less than 5%,
for example to reflect changes in our business and operating model.
We recalculate our baseline GHG emissions in accordance with this pol-
icy, which also complies with the GHG Protocol.
Emissions, waste and women in senior management in 2021 and 2022
hav
e been restated to reflect changes to emission factors, improved in-
put data and calculation methodologies, as well as changes to ac-
counting policies.
ESG accounting processes
Content
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Other relevant documents
This report is in accordance with the GRI Standards. See
www.gn.com/About/Corporate-sustainability for a full GRI con-
tent index.
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Scopes 1 and 2
Combined, scope 1 and (market-based) scope 2 emissions have de-
creased by 47% from the 2021 baseline and 34% from 2022, which
marks a significant step towards our science-based reduction target of
80% by 2030.
Stationary emissions have increased due to a new site with gas con-
sumption in 2023 and a small increase in natural gas consumption at
existing sites. Mobile emissions have increased, due to better data
availability in relation to fuel consumption.
Location-based scope 2 emissions have increased from 2022, despite a
de-crease in electricity and district heat consumption at sites. The
change is due to increased emissions from electric and plug-in hybrid
cars.
Market-based scope 2 emissions have significantly decreased since
2021 be-cause of a rapidly growing share of renewable power.
Scope 3
Total scope 3 emissions have decreased by 20% compared with the
2021 baseline and 24% from 2022. Emissions intensity per unit revenue
across all scopes has also decreased by 31% from 2021. The largest re-
ductions are in category 1 (products and indirect procurement), caused
by decreased direct procurement in the Enterprise, Gaming & Con-
sumer divisions linked to high inventory at the start of 2023, which out-
weighed increased direct procurement in the Hearing division to meet
growing market demands, and category 4 (transportation and distribu-
tion), because of a greater share of ocean and rail freight (vs. air).
New data have significantly improved the data quality and assump-
tions be-hind the scope 3 accounting. The most material changes have
occurred in categories 1 and 11 (emissions from products and product
use), mainly be-cause of increased LCA coverage of the GN product
portfolio. The new LCA data has also improved modelling accuracy in
category 12 (product disposal).
See page 27 for details of our decarbonization initiatives in 2023.
ESG data – climate related
Dimension
Units
Method
Emission Factors
2021
2022
2023
GHG emissions in scope 1
Stationary emission sources
tons CO2e
Fuel-based
DEFRA
444
402*
414*
Mobile emission sources
tons CO2e
Fuel and distance-based
DEFRA
1,888
1,751*
1,942*
Fugitive emission sources
tons CO2e
GHG Protocol
79
71*
58*
Total
tons CO2e
2,411
2,224*
2,414*
GHG emissions in scope 2
tons CO2e
Location-based
tons CO2e
IEA, EPA, DEFRA
6,353
6,431*
6,479*
Market-based
tons CO2e
Instruments, supplier
specific and residual mix
8,096
6,251*
3,150*
Total GHG emissions in scopes 1 and 2 (market-based)
tons CO2e
10,507
8,475*
5,564*
GHG emissions in scope 3
tons CO2e
Scope 3.1: Purchased goods and services
tons CO2e
Spend-based and LCAs
DEFRA
144,020
188,102
131,463
Scope 3.2: Capital goods
tons CO2e
Average spend-based
DEFRA
17,992
11,107
7,500
Scope 3.3: Fuel and energy-related activities
tons CO2e
Average-data method
DEFRA
1,920
1,831
2,069
Scope 3.4: Upstream transportation and distribution
tons CO2e
Distance-based and aver-
age-data
DEFRA, supplier specific
151,985
135,307
96,207
Scope 3.5: Waste generated in operations
tons CO2e
Waste-type-specific
DEFRA
112
120
136
Scope 3.6: Business travel
tons CO2e
Distance and spend-
based
DEFRA
2,650
11,185
13,100
Scope 3.7: Employee commuting
tons CO2e
Distance-based
DEFRA
7,122
9,572
10,059
Scope 3.8: Upstream leased assets
tons CO2e
Asset-specific
IEA, EPA, DEFRA
1,631
1,538
1,548
Scope 3.9: Downstream transportation and distribution
tons CO2e
Distance-based and aver-
age-data
DEFRA
16,972
16,174
16,974
Scope 3.11: Use of sold products
tons CO2e
Direct use-phase emis-
sions (electricity)
IEA, EPA, DEFRA
80,349
75,127
62,116
Scope 3.12: End-of-life treatment of sold products
tons CO2e
Waste-type-specific
DEFRA
794
885
1,153
Scope 3.15: Investments
tons CO2e
Average-data method
DEFRA
4,695
5,613
2,757
Total for reported categories
tons CO2e
430,242
456,562
345,081
Out of scope emissions
tons CO2e
DEFRA
66
78
123
* 2023 data in scope for limited assurance by PwC.
Scope 2 market-based emissions have been restated in 2022, based on work performed to improve reporting processes and data quality.
Emissions in scope 3 categories 1-6 and 8-12 have been restated due to improved data quality and updated emission factors.
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Accounting policies
Scope 1 and 2 emissio
ns
Direct emissions
(scope 1) are from the combustion of purchased fuels for en-
ergy. GN’s direct emissions arise from natural gas consumed at production
sites, offices and retail locations, and from vehicles that are owned or leased
by the company. Direct emissions also
include fugitive emissions, which arise
from GN’s use of refrigerant gases in production facilities.
Indirect emissions (scope 2) are from purchased electricity and district heating
for production sites and offices and electric or hybrid vehicles that are owned
or leased by the company.
O
nly fuel, electricity, and heat that is purchased directly from the vendor by
GN is accounted for in scopes 1 and 2 (GN applies the operational control ap-
proach). Natural gas, electricity, and district heating consumption is reported
based on actual consum
ption from invoices, where possible.
Emissions from vehicles is calculated using the fuel
-based method. Fuel or
electricity consumption from vehicles is obtained from either invoices or sys-
tem
-generated reports from vendors, including leasing companies and fuel
card vendors. Where consumption
data is unavailable, emissions from vehi-
cles are accounted for using the distance
-based method.
Where actual data is not available for the reporting period, consumption is es-
timated based on the relevant historical period. Where consumption data is
not available, spend data is converted to consumption data using an average
price for the closest avail
able time period.
The quantity of energy
consumed is multiplied by the relevant emission factor
as part of the consolidation process in our environmental management sys-
tem. The emission factors are determined from internationally recognized
sources: DEFRA factors for emissions from UK electricit
y, heat, fuel, and
transport, US EPA factors for US electricity
, and IEA factors for electricity
consumed in other locations. GHG emission attributes (from Energy Attribute
Certificates), supplier
-specific and residual mix factors are used to calculate
market
-based scope 2 emissions. Otherwise, location-based factors are used.
Sc
ope 3 emissions
Our scope 3 GHG reporting is based
on the GHG Protocol guidance. Catego-
ries 10 (Processing of goods sold), 13 (Downstream leased assets) and 14
(Franchises) are not relevant to GN and are not reported.
Actual data
is used where available. Otherwise, industry averaged data or
data available from academic studies or similar businesses are used. Where
activity data quality is insufficient, spend data is used as a proxy. All transport-
related emissions are calculated on a
Well-to-Wheel basis.
Category 1
– Purchased goods and services
Emissions from goods and services purchased by GN
, calculated using catego-
rized spend data. This includes both direct and indirect procurement. To fur-
ther improve the accuracy of this category, in 2023 data derived from product
LCAs across all divisions was used instead of spend data.
Category 2
– Capital goods
Emissions from property, plant
, and equipment (PPE), calculated using cate-
gorized spend data. In this case, PPE includes factory and office buildings,
leasehold improvements, plant and machinery, operating assets and
equip-
ment, and assets under construction.
Category 3
– Fuel and energy-related activities
Upstream emissions from energy consumption at sites where GN has
opera-
tional control and for fleet vehicles. Emissions are calculated on a location
-
based basis, using actual energy consumption data from sites and the fleet.
Category 4
– Upstream transportation and distribution
Hearing: All transportation and distribution of goods, including freighting and
warehousing carried out by the supplier and paid for by GN. Data on the dis-
tance, weight and transport mode are collected from GN Hearing’s transpor-
tation providers. Enterprise
, Gaming & Consumer: Emissions from transporta-
tion and warehousing of GN products from global distribution centers to re-
tailers or
web shop and B2B customers (excluding transportation of
SteelSeries products to APAC customers, which are reported in scope 3 cate-
gory 9). Emissions are calculated using inhouse and vendor shipment data. All
freight emissions are calculated using DEFRA freight fac
tors. Warehouse
emissions are modelled using a floorspace estimation and industry averaged
emission factors from the US EPA, unle
ss included by the vendor.
Category 5
– Waste generated in operations
Collection and treatment emissions associated with waste generated by GN
offices and production sites. Emissions are calculated using data from waste
management providers serving four of our five major production sites and
headquarters. For remaining sites, estimates are made based on production
volumes (production sites) and employee numbers (office and retail sites).
Category 6
– Business travel
Emissions from business air and train travel, calculated using ticket data
gathered from travel partners, uplifted using spend data to include travel not
booked through GN’s travel partners. Air travel emissions are uplifted to
account for the indirect effects of non
-CO
2
emissions. Emissions from fuel
purchased by
employees for business travel and hotels are accounted for in
scope 3 category 1.
Category 7
– Employee commuting
Emissions from GN employees’ commuting is based on an employee survey
conducted in 2021, scaled for country
-level changes in employee numbers.
Category 8
– Upstream leased assets
Energy use at sites not included in scopes 1 and 2. Emissions are calculated
with a market
-based approach using actual data obtained from building man-
agement providers and estimated data, where necessary. Since 2022, some
scope 1 and 2 emissions have been
recategorized into scope 3 category 8.
Category 9
– Downstream transportation and distribution
Hearing: Emissions associated with the retail of GN products via retail
locations not owned by GN, calculated using average energy intensity per
product sold, by major market, and location
-based emission factors.
Enterprise and
Gaming & Consumer: Estimated warehousing emissions not
paid for by GN and SteelSeries product freighting not directly paid for by GN.
Category 11
– Use of sold products
Emissions from the power consumption of all GN products, excluding Hearing
accessories, calculated using estimated average use cases and product life-
times for main product categories.
Category 12
– End-of-life treatment of sold products
Collection and waste treatment of GN products and packaging, calculated us-
ing averaged product
s and packaging weights by grouped market locations.
Category 15
- Investments
Estimated scope 1 and 2 emissions of
GN’s investments calculated using reve-
nue and proxy data, combined with EEIO data and allocated based on share of
investment.
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Notes – Environmental
Energy, waste, and water consumption
Energy consumption includes electricity, fuel, and heating used at all
GN sites under operational control and in the GN car fleet. Energy con-
sumption is estimated based on similar sites in terms of size and geog-
raphy, where actual data is not available.
Waste reported here amounts to all waste generated at all GN sites.
Actual data is used to calculate the waste volumes from the main pro-
duction sites and headquarters. Waste volume for GN’s hearing aid
production site in the U.S. was estimated based on the other produc-
tion sites in Denmark, China, Malaysia, and Spain, while smaller offices’
waste volumes were estimated based on similar sites in terms of size
and geography. Waste figures for 2020-2022 have been restated to
correct for a calculation error. Water consumption was calculated in
the same way as waste generation.
Renewable energy share
The percentage of GN’s energy consumption within the operational
control boundary that comes from renewable sources, as stipulated by
contractual instruments, such as green tariffs, energy attribute certifi-
cates purchased by GN or where GN has entered into power purchase
agreements.
TCO Certified products
A TCO Certified product is defined as a product that has received sepa-
rate certification from TCO Certified. For an overview of current GN
products with TCO certification, see https://tcocertified.com/product-
finder/index?brand=Jabra&tq=&pp=1.
FSC certified packaging
These data points are calculated by dividing the total number of prod-
ucts sold in 2023 with FSC certified packaging with the total number of
sold products. To calculate the number that represents the share of
newly launched products only, the same number is divided by the total
number of sold products that were launched in 2023 only.
LCAs completed
This includes all completed product LCAs that have been externally
verified by Bureau Veritas. LCAs have been completed for Jabra,
SteelSeries, and ReSound products.
E-waste recycling financed
GN Audio is required as part of the WEEE Directive in the EU to help fi-
nance e-waste collection and recycling infrastructure in line with the
volume of electronic equipment put on the market in countries above a
set threshold. This requirement only applies to GN Audio and includes
products, batteries, and packaging (both plastic and cardboard). Per
law, our compliance with WEEE in Denmark was subject to an external
audit.
ESG data – other
Dimension
Units
2018
2019
2020
2021
2022
2023
2025 tar-
get
Environmental
Energy consumption
MWh
28,636
29,459
30,270
Renewable energy share
%
3%
9%
30%
Total waste generated
metric tons
575
656
781
673
Water consumption
m3
71,594
73,975
73,073
74,948
TCO Certified products
# certified products
0
0
4
17
29
38
FSC certified packaging - share of total sold products
% sold products
0%
0%
4.9%
15%
20%
26%
FSC certified packaging - share of newly launched sold products
% sold products
0%
0%
40%
100%
51%
62%
100%
Product LCAs completed and externally verified
# LCAs
0
0
0
0
9
20
E-waste recycling financed
tons
2,788
3,671
4,210
4,777
4,302
3,921
Social
Number of people with hearing loss helped
# m people
9.0
9.1
9.4
9.8
10.5
>10
Supplier ESG audits
# supplier audits
39
49
39
40
31
61
Lost time incidents (LTI) at GN-operated manufacturing sites
# incidents
5
2
11
3
Lost time incidents frequency rate at GN-operated manufacturing sites
rate
0.44
Lost time incidents severity rate at GN-operated manufacturing sites
rate
0.74
Days lost due to injury at GN-operated manufacturing sites
# days
5
Employee turnover
% of total workforce
22.0%
20.8%
Conflict Minerals Reporting Templates received
%CMRTs received
98%
98%
97%
100%
100%
100%
100%
Governance
AGM-elected women on GN's Board
% women
50%
40%
57%
57%
66%
50%
>40%
Women in senior management*
% women
20%
20%
21%
22%
23%
22%
>25%
Whistleblower cases
Number of cases
10
15
14
29
37
29
* 2023 data in scope for limited assurance by PwC. 2021 and 2022 data for women in senior management has been recalculated ba
sed on the updated accounting
policy.
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Notes - Social
People with hearing loss helped
This number is calculated using sales volumes of GN hearing aids and
assumptions based on EHIMA figures for binaural treatment and re-
placement rates (five years for high-income countries and eight years
for low-income countries).
Supplier ESG Audits
This includes any on-site audit executed by GN of tier 1 and key tier 2
suppliers dedicated to environmental, social, and governance compli-
ance with local law and our Codes of Conduct.
Lost time incidents (LTI)
An injury sustained by an employee that leads to loss of productive
work in the form of absenteeism or delays. In 2023, the definition was
expanded to include both manufacturing and warehousing sites. Alt-
hough occupational health and safety procedures apply across all GN’s
sites, the metric is limited to these sites as it is where LTIs are most
probable and pose the highest risk to employee wellbeing. For the LTI
frequency and severity rates, we divided the number of cases and the
total number of days lost respectively by the average number of total
hours worked in GN by the blue collar workforce, multiplied by 1 mil-
lion.
Employee turnover
Includes both voluntary and involuntary turnover for both white collar
and blue collar. As the integration of HR and IT systems is ongoing, this
number excludes SteelSeries.
Notes – Governance
Women in Board of Directors
The percentage of female Board members on December 31, 2023.
For the above two data points, we will include other underrepresented
genders in this number in future reporting, if this becomes a relevant
distinction either based on gender identification of GN employees or
through additional disclosure requirements.
Whistleblower cases
The number of cases reported through our whistleblower hotline, the
GN Alertline. Benchmarked against companies of similar size and geog-
raphy, the current number of cases seems representative of a well-
functioning whistleblower system.
Content
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Accounting policies
Accounting policy for women in senior management positions
The percentage of female employees holding senior management posi-
tions on December 31, 2023, where senior management is defined as em-
ployees occupying a position at GN level 17.1 or above (equivalent to a
Mercer IPE score 56 or above). The accounting policy has been updated to
more accurately and robustly define senior management positions based
on job levels, rather than seniority being based on membership of the
Global Leadership Group, as it was in previous years.
Data is collected directly from the global HR system and employees are
categorized into the relevant senior management employee group based
on a clear set of criteria based on the chain of command assigned in the HR
system.
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We are in continuous dialogue with our stakeholders to ensure we un-
derstand their requirements and find ways to work in partnership to
strengthen our business and the societies in which we operate.
Customers
We proactively engage with customer groups to improve our products.
We are keen to understand our customers’ and partners’ sustainability
requirements and aim to meet these standards. In 2023, sustainability
became an even more prominent topic of engagement with customers,
including packaging, LCAs, certifications, decarbonization, and circular-
ity.
Employees
All employees engage biannually in professional development discus-
sions. All employees are encouraged to participate in the annual en-
gagement survey, a tool that enables leaders and employees to ad-
dress strengths as well as areas of improvement. Employees can ap-
proach their HR business partner for confidential discussions, as well as
report any concerns to a confidential whistleblower hotline, GN Alert-
line.
Investors
As a public company, GN discloses ESG data in relevant areas via our
integrated annual report, our Annual General Meeting, and where rele-
vant on request to ESG rating agencies and investors. To ensure our
ESG disclosures always meet investor requirements, we welcome dia-
logue with our investors on ESG topics at any time. In 2023, we contin-
ued to make ESG a prominent part of our proactive communication to
investors.
Regulatory authorities
GN assesses relevant regulations on an ongoing basis to ensure we
comply with all relevant legislation. New legislation is emerging in the
area of product sustainability, including further chemical restrictions,
right to repair, and battery legislation. On a corporate level, aside from
CSRD (see page 25), we closely monitor legislation in the area of ESG
due diligence (CSDDD) and human rights-related laws across many dif-
ferent geographies.
Suppliers
We expect our suppliers to uphold the same standards as we set for
ourselves. We audit our suppliers to ensure they comply with GN’s
Supplier Codes of Conduct and other relevant policies. We work in
partnership with our suppliers to support their compliance and to
jointly achieve sustainability goals (see page 32).
Interest groups
We support the United Nation’s SDGs through our membership of the
UN Global Compact. Our efforts to raise awareness of hearing loss and
the benefits of early treatment include our participation in industry
groups such as the European Hearing Instrument Manufacturers Asso-
ciation (EHIMA) and promotion of the World Health Organization’s
World Hearing Day.
Stakeholder engagement
Content
Memberships, certifications, and
ratings
Rating/
certification
Memberships
201034
Aﬃliate
member
UN Global Compact
202234
Aﬃliate
member
Responsible Business
Alliance
Last
updated
Page
reference
202357Certified
Forest Stewardship
Council
2023CertifiedTCO Certified
202332BronzeEcoVadis
202329CertifiedISO
202354Aligned
Global Reporting
Initiative
2023AAMSCI ESG Ratings
2023
12.3
(low risk)
Sustainalytics ESG
Rating
2023BCDP Climate Change
2023CCDP Water
Certifications
ESG reporting and performance
TCO
certified GN
products
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Policy overview and governance
Content
Policy
What it covers
Policies guiding internal
processes
Sustainability | ESG Pol-
icy
GN’s general approach to sustainability across all ESG areas.
Diversity, Equity and In-
clusion Policies
GN’s initiatives and tools to drive greater diversity, equity, and inclusion across GN.
Quality Policies
GN's processes that ensure we foster a quality culture with the objective to develop, manufacture, and market products and services with superior quality as
perceived by customers.
Ethics Guide*
Our internal Code of Conduct. The responsibilities and guidelines that describe the ethical standard expected of all GN employees, as well as a decision-making
process supporting the resolution of ethical issues.
Privacy Policy
How GN protects personal data belonging to customers, users, and employees.
Anti-corruption Policy*
How GN employees, suppliers, customers, and third-party representatives are expected to conduct business the right way, in compliance with all applicable
anti-bribery and anti-corruption laws, including (but not limited to) the US Foreign Corrupt Practices Act and the UK Bribery Act 2010.
Gifts, travel, and enter-
tainment Policy*
Guidelines for gifts, travel, and entertainment in GN, within the wider anti-corruption policy.
Non-retaliation Policy**
GN’s commitment to ensure that any employee who reports detected or suspected misconduct to a manager will not suffer any kind of retaliation or repercus-
sion as a result thereof.
Tax Policy
How GN pays its taxes in a responsible way.
Remuneration Policy
The guidelines for remuneration, including incentive pay, to members of GN’s registered management and such members’ remuneration in GN’s wholly-owned
subsidiaries, as well as remuneration to GN’s Board of Directors, in accordance with Section 4 of the Rec
ommendations on Corporate Governance and Section
139 of the Danish Companies Act.
Flexible Work Policy
How GN ensures a healthy work-life balance for employees by allowing for optimization of work arrangements based on individual circumstances.
Requirements for rele-
vant suppliers
Supplier Code of Con-
duct
How suppliers are expected to conduct business with respect to human rights, environmental standards, and ethical business practices across the value chain.
Modern Slavery and Sup-
ply Chain Disclosure
GN’s policies and procedures to comply with the UK Modern Slavery Act (2015) and the California Transparency in Supply Chains Act (2012).
Conflict Minerals Policy
GN’s requirements and supporting due diligence process to ensure our suppliers do not source conflict minerals to be used in our products.
*All relevant employees required to sign.
**All managers required to sign.
Sustainability governance
The Board of Directors
The Board approves the strategic direction and key
decisions in all sustainability areas.
Executive Leadership Team
The leaders of GN’s business divisions and functions of
scale together with the CEO and the CFO constitute the
Executive Leadership Team (E LT).
The ELT is responsible for including sustainability in
business decisions and for driving and tracking initiatives
at an operational level and as part of the company’s
strategy.
Each member of the ELT has sustainability objectives as
part of their annual incentives.
Group Sustainability
Group Sustainability, reporting to the CFO, holds overall
responsibility for supporting the business in driving the
sustainability agenda and external reporting.
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In accordance with Article 8 of the delegated act for reporting in com-
pliance with the EU Taxonomy regulation, as a non-financial listed
company, GN assessed the eligibility and alignment of our economic
activities with the EU Taxonomy, based on activities listed in Annexes
to the climate and environmental delegated acts.
Methodology and materiality
For the purpose of this disclosure, we executed a full screening of all
GN’s core and secondary economic activities against the eligible activi-
ties listed in the Taxonomy Compass. For eligible activities, we have as-
sessed the feasibility of obtaining the required data to prove substan-
tial contribution to the environmental objectives, only considering
parts of our activities for which we have detailed data available due to
their significant contribution to GN’s overall business model. As an ex-
ample, it is not feasible to apply extensive alignment criteria on a very
minor building renovation project that does not directly contribute to
GN’s core activities. This feasibility forms a threshold for reporting on
alignment.
Accounting policies for Turnover, OPEX, and CAPEX
The turnover KPI is defined as Turnover-eligible turnover divided by to-
tal turnover. The total turnover is GN’s total revenue. Our consolidated
net turnover can be reconciled to our consolidated financial statement,
see the income statement on page 82 ('Revenue').
The CAPEX KPI is defined as Taxonomy-eligible CAPEX divided by total
CAPEX. The total CAPEX consists of additions to tangible and intangi-
ble fixed assets before depreciation, amortization, and any re-measure-
ments. It includes acquisitions of property plant and equipment, intan-
gible assets, leases with usage rights, investment properties, additions
due to acquired business and excludes current and non-current assets,
goodwill.
The OPEX KPI is defined as Taxonomy-eligible OPEX divided by the to-
tal OPEX. The total OPEX consists of research and development, ex-
cluding overhead; building renovation; short-term lease agreements;
maintenance/upkeep and repairs: and any other direct expenditure re-
lated to the routine maintenance of tangible assets by the company or
by the third party to whom activities are outsourced that are necessary
to ensure the continued and effective functioning of such assets.
Eligibility and alignment with climate and environmental related
objectives
Core activities
One of GN’s core activities is eligible to the circular economy objective,
as this activity falls in category 1.2 of the EU . Taxonomy: Manufacture
of electrical and electronic equipment, which includes the manufactur-
ing of our hearing aids, and excludes outsourced manufacturing for all
other product categories. In accordance with the regulation, we will as-
sess alignment with the circular economy objective for this activity in
2024.
Secondary activities
In addition, our screening yielded that in 2023, GN was involved in
three secondary economic activities that match taxonomy-eligibility
criteria (see tables for details). As these are secondary activities, these
logically do not represent any turnover. Neither of these activities
meet the materiality threshold as described above to justify a detailed
alignment assessment.
EU Taxonomy Regulation disclosure
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Content
Turnover
Financial year 2023
2023
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities (1)
Code (2)
Turno-
ver (3)
Prop. of
turnover,
year 2023
(4)
Climate
change
mitiga-
tion (5)
Climate
change
adapta-
tion (6)
Water
(7)
Pollution
(8)
Circular
economy
(9)
Biodiver-
sity (10)
Climate
change
mitiga-
tion (11)
Climate
change
adaption
(12)
Water
(13)
Pollution
(14)
Circular
economy
(15)
Biodiver-
sity (16)
Minimum
safe-
guards
(17)
Prop. of Taxonomy
aligned (A.1) or eli-
gible (A.2) turno-
ver, year 2023 (18)
Category
enabling
activity
(19)
Category
transi-
tional ac-
tivity (20)
Text
(DKKm)
%
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-
aligned)
Turnover of environmentally sustainable activities (Taxonomy-
aligned) (A.1)
0
0%
0%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
Of which Enabling
0%
0%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
E
Of which Transitional
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
Manufacture of electrical and electronic equipment
6,802
37.53%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
0%
Turnover of Taxonomy-eligible but not environmentally sus-
tainable activities (not Taxonomy-aligned activities) (A.2)
6,802
37.53%
0%
0%
0%
0%
0%
0%
0%
A. Turnover of Taxonomy eligible activities (A1 + A2)
6,802
37.53%
0%
0%
0%
0%
0%
0%
0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities
11,318
62,47%
Total
18,120
100%
CAPEX
Financial year 2023
2023
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities (1)
Code (2)
CAPEX
(3)
Prop. of
CAPEX,
year 2023
(4)
Climate
change
mitiga-
tion (5)
Climate
change
adapta-
tion (6)
Water
(7)
Pollution
(8)
Circular
economy
(9)
Biodiver-
sity (10)
Climate
change
mitiga-
tion (11)
Climate
change
adaption
(12)
Water
(13)
Pollution
(14)
Circular
economy
(15)
Biodiver-
sity (16)
Minimum
safe-
guards
(17)
Prop. of Taxonomy
aligned (A.1) or eli-
gible (A.2) turno-
ver, year 2023 (18)
Category
enabling
activity
(19)
Category
transi-
tional ac-
tivity (20)
Text
(DKKm)
%
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy
-
aligned)
CAPEX
of environmentally sustainable activities (Taxonomy-
aligned) (A.1)
0
0%
0%
0%
0%
0%
0%
0%
Y Y Y Y Y Y Y
0%
Of which Enabling
0%
0%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
E
Of which Transitional
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
Renovation of existing buildings
CCM 7.2 /
CCA 7.2
9
0.60%
EL
EL
N/EL
N/EL
N/EL
N/EL
3.15%
T
Installation, maintenance, and repair of charging stations for
electric vehicles
CCM 7.4 /
CCA 7.4
2
0.15%
EL
EL
N/EL
N/EL
N/EL
N/EL
0.08%
E
CAPEX
of Taxonomy-eligible but not environmentally sustain-
able activities (not Taxonomy-aligned activities) (A.2)
12
0.75%
0%
0%
0%
0%
0%
0%
3.24%
A. CAPEX of Taxonomy eligible activities (A1 + A2)
12
0.75%
0%
0%
0%
0%
0%
0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CAPEX of Taxonomy-non-eligible activities
1,537
99.25%
Total
1,548
100%
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Content
OPEX
Financial year 2023
2023
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities (1)
Code (2)
OPEX
(3)
Prop. of
OPEX,
year 2023
(4)
Climate
change
mitiga-
tion (5)
Climate
change
adapta-
tion (6)
Water
(7)
Pollution
(8)
Circular
economy
(9)
Biodiver-
sity (10)
Climate
change
mitiga-
tion (11)
Climate
change
adaption
(12)
Water
(13)
Pollution
(14)
Circular
economy
(15)
Biodiver-
sity (16)
Minimum
safe-
guards
(17)
Prop. of Taxonomy
aligned (A.1) or eli-
gible (A.2) turno-
ver, year 2023 (18)
Category
enabling
activity
(19)
Category
transi-
tional ac-
tivity (20)
Text
(DKKm)
%
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y;N;N/EL
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-
aligned)
OPEX of environmentally sustainable activities (Taxonomy-
aligned) (A.1)
0
0%
0%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
Of which Enabling
0%
0%
0%
0%
0%
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
E
Of which Transitional
0%
0%
Y
Y
Y
Y
Y
Y
Y
0%
T
A.2. Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities)
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
EL;N/EL
Renovation of existing buildings
CCM 7.2 /
CCA 7.2
3
0.09%
EL
EL
N/EL
N/EL
N/EL
N/EL
0.02%
T
Installation, maintenance, and repair of charging stations for
electric vehicles
CCM 7.4 /
CCA 7.4
0
0.00%
EL
EL
N/EL
N/EL
N/EL
N/EL
0%
Manufacture of electrical and electronic equipment
CE 1.2
1,306
36.82%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
0%
Repair, refurbishment, and remanufacturing
CE 5.1
128
3.61
N/EL
N/EL
N/EL
N/EL
EL
N/EL
0%
OPEX of Taxonomy-eligible but not environmentally sustaina-
ble activities (not Taxonomy-aligned activities) (A.2)
1,437
40.53%
0%
0%
0%
0%
0%
0%
0.02%
A. OPEX of Taxonomy eligible activities (A1 + A2)
1,437
40.53%
0%
0%
0%
0%
0%
0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OPEX of Taxonomy-non-eligible activities
2,109
59.47%
Total
3,546
100%
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Content
GN continues to develop our climate-related risk management and dis-
closure in line with the recommendations of the Task Force on Climate-
related Financial Disclosures (TCFD).
This table provides an overview of our TCFD alignment, along with ref-
erences to where you can find further information in this report.
TCFD index
TCFD Pillar
Recommendation
Details
Reference
Governance
Disclose company’s gov-
ernance around climate
-
related risks and oppor-
tunities
GN’s governance of climate-related issues is outlined in the Sustainability Governance section of this report.
Sustainability govern-
ance
- page 60
Strategy
Disclose actual and po-
tential impacts of cli-
mate
-related risks and
opportunities on busi-
ness, strategy, and finan-
cial planning, where
ma-
terial
For an overview of GN’s climate
-related risks please see page 42. We anticipate that increasing investments in low-carbon technology, including batteries, and increasing availability of circular infrastruc-
ture and services will provide opportunities to mee
t demand for low-impact products, comply with new regulations, and reduce raw material costs. Sustainability is a key enabler of GN’s strategy. Climate
change impact is a strategic decision
-making factor across the business and GN’s activities are evaluated using a set of success criteria that pay attention to climate-related issues as well as traditional
business objectives.
Financial resources allocated to supporting GN’s low
-carbon transition have increased over the past year, e.g. enabling sourcing of materials with lower carbon footprints, supply chain engagement to
collect data via EcoVadis, and implementing energy efficiency and renewable energy measures at key production sites.
Environmental perfor-
mance
- pages 27-32
Risk management
Disclose how the com-
pany identifies, assesses,
and manages climate
-re-
lated risks
Climate-related risks and opportunities are included in ongoing enterprise risk management. High-level climate scenario analysis was conducted using the IEA's new Net Zero Roadmap report and the
Net
-Zero Emissions by 2050 Scenario, as well as regional-level climate change impact projections from the IPCC's Working Group II report from the Fifth Assessment Report (2014). More comprehensive
climate
-related scenario analysis will be phased in to align our approach with TCFD recommendations.
Risk management - page
42
Metrics and targets
Disclose metrics and tar-
gets used to assess and
manage relevant cli-
mate
-related risks and
opportunities where
such information is ma-
terial
Metrics
The principal metrics used to assess climate
-related risks and opportunities are:
-
Absolute scope 1, 2, and 3 greenhouse gas emissions
-
Renewable energy share (as % of total energy consumption)
Performance on these metrics and other material ES
G KPIs are disclosed in this report.
Targets
GN has set near
-term science-based targets through the Science Based Targets initiative (SBTi). GN commits to reduce absolute scope 1 and 2 GHG emissions 80% by 2030 from a 2021 base year. GN
also commits to re
duce absolute scope 3 GHG emissions 25% within the same timeframe. These targets were validated by SBTi in December 2022. GN will reach net-zero emissions, in line with the SBTi
Net
-Zero Standard, by 2050 at the latest.
GN also has a short
-term target to reduce emissions from business travel per employee by 50% by 2025 from a 2019 baseline.
GN will draw up a transition plan within the next two years, outlining how we will reach our science-based targets, and work towards being net-zero before 2050.
ESG data - climate-re-
lated
- pages 55-56
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Q4 financial highlights 66
Quarterly financial highlights 68
Quarterly reporting by segment 69
Regional growth composition 71
Q4 segment disclosures 72
Additional financial information 202
3
(unaudited)
GN Store Nord
Annual Report 2023
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Content
GN Hearing
Revenue
GN Hearing’s revenue in Q4 2023 was DKK 1,808 million compared to
DKK 1,807 million in Q4 2022, driven by an organic revenue growth of
7%. Revenue growth was 0% including around -3% impact from the de-
velopment in foreign exchange rates and around -4% impact from
M&A.
In North America, GN Hearing delivered continued strong performance
in Q4 2023 in a very healthy hearing aid market. The initial launch of
ReSound Nexia as well as the continued strong performance of Re-
Sound OMNIA, drove an organic revenue growth of 24% in North
America. In Europe, GN Hearing delivered an organic revenue growth
of -3% in a soft hearing aid market on top of a larger than normal reve-
nue in Q4 2022 from GN's strategic partner Cochlear. In Rest of World,
organic revenue growth was -16% driven by strong growth in Australia
and China on top of a larger than normal revenue in Q4 2022 from
GN's strategic partner Cochlear.
Earnings and other financial highlights
GN Hearing’s adj. gross profit ended at DKK 1,099 million in Q4 2023
(compared to DKK 1,205 million in Q4 2022. The development reflects
an annualization of increasing input costs as well as the disposal of re-
tail activities including BelAudição.
GN Hearing’s adj. EBITA was DKK 282 million, with the Core business
delivering adj. EBITA of DKK 311 million corresponding to an adj.
EBITA margin of 18.0%. The Emerging business, primarily
JabraEnhance.com, delivered an EBITA of DKK -29 million. Reported
EBITA amounted to DKK 143 million reflecting non-recurring items of
DKK -139 million in Q4 2023.
In Q4 2023, free cash flow excl. M&A reached DKK 155 million, com-
pared to DKK 64 million in Q4 2022.
GN Audio
Revenue
GN Audio’s revenue in Q4 2023 was DKK 3,261 million compared to
DKK 3,463 million in Q4 2022, due to -4% organic revenue growth.
Revenue growth was -6% including around -2% impact from the
development in foreign exchange rates.
The development was driven by -9% organic revenue growth in
Enterprise, and by -14% organic growth in Consumer. SteelSeries
delivered organic revenue growth of 17% while gaining market share in
a stabilized market. The growth was driven by the strong and updated
product line-up.
In North America, GN Audio delivered organic revenue growth of -4%,
while Europe saw organic revenue growth of -8%. Organic revenue
growth in the Rest of World region was 7% in Q4 2023.
Earnings and other financial highlights
GN Audio delivered a gross margin of 43.5% in Q4 2023 compared to
39.7% in Q4 2022, driven by easing freight costs on top of negative
business mix.
Q4 financial highlights
Financial overview Q4 2023
GN Hearing
GN Audio
DKK million – Q4 2023
Core
business
Emerging
business
GN
Hearing
Enterprise
Consumer
Steel-
Series
GN
Audio
Revenue
1,727
81
1,808
1,997
368
896
3,261
Organic growth
6%
28%
7%
-9%
-14%
17%
-4%
Adj. EBITA**
311
-29
282
432
Adj. EBITA margin**
18.0%
15.6%
13.2%
Group total*
GN Hearing
GN Audio
DKK million
Q4 2023
Q4 2022
Growth
Q4 2023
Q4 2022
Growth
Q4 2023
Q4 2022
Growth
Revenue
5,069
5,270
-4%
1,808
1,807
0%
3,261
3,463
-6%
Organic growth
0%
2%
7%
14%
-4%
-3%
Adj. Gross profit**
2,518
2,581
-2%
1,099
1,205
-9%
1,419
1,376
3%
Adj. Gross profit margin**
49.7%
49.0%
0.7%p
60.8%
66.7%
-5.9%p
43.5%
39.7%
3.8%p
Adj. EBITA**
644
744
-13%
282
472
-40%
432
344
29%
Adj. EBITA margin**
12.7%
14.1%
-1.4%p
15.6%
26.1%
-10.5%p
13.2%
9.6%
3.6%p
Adj. Earnings per share (EPS)***
2.86
3.92
-27%
Free cash flow excl. M&A
769
-217
986
155
64
91
659
-21
680
*
Including "Other"
**
Excluding non-recurring items (DKK -79 million in OPEX in GN Audio, DKK -60 million in COGS in GN Hearing, DKK -79 million in OPEX in GN Hearing and DKK -160 million in OPEX in
Other) in 2023. Excluding non
-recurring items (DKK -152 million in OPEX in GN Audio, DKK -11 million in COGS in GN Hearing and DKK -25 million in OPEX in GN Hearing) in 2022
*** Excluding non-recurring items (DKK -378 million in 2023 and DKK -188 million in 2022) and amortization of acquired intangible assets
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GN Audio’s adj. EBITA ended at DKK 432 million in Q4 2023, translat-
ing into an adj. EBITA margin of 13.2%, compared to 9.6% in Q4 2022
reflecting the gross margin impact and tightly managed OPEX. Re-
ported EBITA was DKK 353 million, reflecting DKK -79 million in non-
recurring items related to the initiatives to improvement margins in-
cluding One-GN initiatives.
In Q4 2023, free cash flow excl. M&A reached DKK 659 million, com-
pared to DKK -21 million in Q4 2022 driven by the improved profitabil-
ity and a decrease in working capital as a result of the inventory reduc-
tions.
GN Store Nord
GN Store Nord’s adj. EBITA was DKK 644 million compared to DKK 744
million in Q4 2022 (EBITA in Other amounted to DKK -70 million ex-
cluding non-recurring items), negatively impacted by the high compari-
son base in GN Hearing. This corresponds to an adj. EBITA margin of
12.7% in Q4 2023 compared to 14.1% in Q4 2022. Reported EBITA was
DKK 266 million, reflecting non-recurring items of DKK -378 million
due to costs related to unlocking synergies as part of the One-GN
transformation.
In Q4 2023, amortization of acquired intangible assets amounted to
DKK -90 million compared to DKK -116 million in Q4 2022. Financial
items were DKK -117 million in Q4 2023 compared to DKK -82 million
in Q4 2022, driven by run-rate effects from the higher net interest-
bearing debt.
In Q4 2023, free cash flow excl. M&A reached DKK 769 million, com-
pared to DKK -106 million in Q4 2022 driven by strong profitability and
a decrease in working capital as a result of the inventory reductions.
Development compared to 2022 (statutory results)
DKK million
Adjusted 2023
Non-recurring
adjustments
Reported 2023
Reported 2022
Revenue
18,120
-
18,120
18,687
Production costs
-9,082
-93
-9,175
-9,555
Gross profit
9,038
-93
8,945
9,132
Development costs
-1,343
-203
-1,546
-1,405
Selling and distribution costs
-4,296
-101
-4,397
-4,563
Management and administrative expenses
-1,613
-197
-1,810
-1,587
Other operating income and costs, net
8
-
8
-17
EBITA
1,794
-594
1,200
1,560
In 2023, the markets presented a mixed bag of tailwinds and head-
winds, but the company executed well and delivered strong results. GN
Store Nord’s revenue ended at DKK 18,120 million including organic
revenue growth of -1% compared to -3% in 2022 - in line with financial
guidance. The impact from the development in foreign exchange rates
was -2%. Gross margin of 49.4% in 2023 was slightly higher than the
48.9% reported in 2022, driven by DKK -252 million non-recurring
items in 2022 versus DKK -93 million in 2023. The 2022 non-recurring
items included a DKK -196 million non-cash PPA related to the
SteelSeries acquisition. The development in OPEX reflects the increase
of non-recurring items of DKK-147 million in 2023 compared to 2022.
These costs primarily relate to the One-GN integration, which was an-
nounced in Q3 2023. Excluding these non-recurring items, the develop-
ment in OPEX primarily reflects continued cost reduction measures im-
plemented throughout the year on top of inflationary impact and IT in-
vestments. The development in other profit & loss items and, free cash
flow and capital structures are consistent with those reported under
the “Financial review 2023” section of this report.
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Q4
Q4
Full year
Full year
2023
2022
2023
2022
DKK million
(unaud.)
(unaud.)
(aud.)
(aud.)
GN Store Nord
Revenue
5,069
5,270
18,120
18,687
Revenue growth
-4%
29%
-3%
18%
Organic growth
0%
3%
-1%
-3%
Gross profit margin
48.5%
48.8%
49.4%
48.9%
EBITA*
266
556
1,200
1,560
EBITA margin*
5.2%
10.6%
6.6%
8.3%
Profit (loss) before tax
48
354
343
725
Effective tax rate
18.8%
21.5%
22.4%
21.4%
ROIC (EBITA*/Average invested capital)
5%
9%
5%
9%
Earnings per share, basic (EPS)
0.25
2.06
1.64
4.00
Earnings per share, fully diluted (EPS diluted)
0.25
2.05
1.64
3.99
Free cash flow excl. M&A
769
-105
1,092
-1,291
Cash conversion (Free cash flow excl. M&A/EBITA*)
289%
-19%
91%
-83%
Equity ratio
31.3%
22.2%
31.3%
22.2%
Net interest-bearing debt
10,567
14,561
10,567
14,561
Net interest-bearing debt (period-end)/EBITDA
6.0
7.1
6.0
7.1
-
-
-
-
Outstanding shares, end of period (thousand)
145,613
127,973
145,613
127,973
Average number of outstanding shares (thousand)
145,562
127,964
138,883
127,823
Average number of outstanding shares, fully diluted (thousand)
145,579
128,120
138,991
128,126
Treasury shares, end of period (thousand)
5,300
9,220
5,300
9,220
Share price at the end of the period
171.8
159.8
171.8
159.8
Market capitalization
25,016
20,444
25,016
20,444
ROIC and NIBD/EBITDA are calculated based on EBITA and EBITDA for the
latest four quarters
* Excluding gain (loss) on divestments of operations etc. and amortization of acquired intangible assets but
including amortization of development projects and software developed in-house.
Q4
Q4
Full year
Full year
2023
2022
2023
2022
DKK million
(unaud.)
(unaud.)
(aud.)
(aud.)
GN Hearing
Revenue
1,808
1,807
6,802
6,227
Revenue growth
0%
26%
9%
17%
Organic growth
7%
14%
13%
5%
Gross profit margin
57.5%
66.1%
59.9%
62.7%
EBITA*
143
436
554
453
EBITA margin*
7.9%
24.1%
8.1%
7.3%
ROIC (EBITA*/Average invested capital)
7%
5%
7%
5%
Free cash flow excl. M&A
155
64
269
-377
Cash conversion (Free cash flow excl. M&A/EBITA*)
108%
15%
49%
-83%
GN Audio
Revenue
3,261
3,463
11,318
12,460
Revenue growth
-6%
30%
-9%
19%
Organic growth
-4%
-3%
-8%
-8%
Gross profit margin
43.5%
39.7%
43.0%
41.9%
EBITA*
353
182
1,017
1,299
EBITA margin*
10.8%
5.3%
9.0%
10.4%
ROIC (EBITA*/Average invested capital)
9%
17%
9%
17%
Free cash flow excl. M&A
659
-21
1,034
-91
Cash conversion (Free cash flow excl. M&A/EBITA*)
187%
-12%
102%
-7%
ROIC and NIBD/EBITDA are calculated based on EBITA and EBITDA for the latest
four quarters
* Excluding gain (loss) on divestments of operations etc. and amortization of acquired intangible assets but
including amortization of development projects and software developed in-house.
Quarterly financial highlights
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Content
Quarterly reporting by segment
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
YTD 2022
YTD 2023
DKK million
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
(aud.)
Income statement
Revenue
GN Hearing
1,337
1,529
1,554
1,807
1,622
1,719
1,653
1,808
6,227
6,802
GN Audio
2,522
3,328
3,147
3,463
2,592
2,675
2,790
3,261
12,460
11,318
Total
3,859
4,857
4,701
5,270
4,214
4,394
4,443
5,069
18,687
18,120
Organic growth
GN Hearing
2%
4%
0%
14%
15%
15%
15%
7%
5%
13%
GN Audio
-30%
10%
-2%
-3%
2%
-18%
-8%
-4%
-7%
-8%
Total
-21%
8%
-1%
3%
7%
-8%
0%
0%
-3%
-1%
Gross profit
GN Hearing
801
924
988
1,194
979
1,039
1,019
1,039
3,907
4,076
GN Audio
1,006
1,502
1,341
1,376
1,062
1,183
1,205
1,419
5,225
4,869
Total
1,807
2,426
2,329
2,570
2,041
2,222
2,224
2,458
9,132
8,945
Gross profit margin
GN Hearing
59.9%
60.4%
63.6%
66.1%
60.4%
60.4%
61.6%
57.5%
62.7%
59.9%
GN Audio
39.9%
45.1%
42.6%
39.7%
41.0%
44.2%
43.2%
43.5%
41.9%
43.0%
Total
46.8%
49.9%
49.5%
48.8%
48.4%
50.6%
50.1%
48.5%
48.9%
49.4%
Development costs
GN Hearing
-138
-142
-146
-124
-166
-130
-126
-167
-550
-589
GN Audio
-189
-166
-188
-238
-188
-226
-190
-290
-781
-894
Other*
-21
-16
-10
-27
-13
-14
-19
-17
-74
-63
Total
-348
-324
-344
-389
-367
-370
-335
-474
-1,405
-1,546
Selling and distribution costs and administrative expenses etc.
GN Hearing
-733
-776
-761
-634
-760
-741
-703
-729
-2,904
-2,933
GN Audio
-672
-804
-713
-956
-711
-751
-720
-776
-3,145
-2,958
Other*
-38
-23
-22
-35
-30
-29
-36
-213
-118
-308
Total
-1,443
-1,603
-1,496
-1,625
-1,501
-1,521
-1,459
-1,718
-6,167
-6,199
EBITA
GN Hearing
-70
6
81
436
53
168
190
143
453
554
GN Audio
145
532
440
182
163
206
295
353
1,299
1,017
Other*
-59
-39
-32
-62
-43
-43
-55
-230
-192
-371
Total
16
499
489
556
173
331
430
266
1,560
1,200
EBITA margin
GN Hearing
-5.2%
0.4%
5.2%
24.1%
3.3%
9.8%
11.5%
7.9%
7.3%
8.1%
GN Audio
5.7%
16.0%
14.0%
5.3%
6.3%
7.7%
10.6%
10.8%
10.4%
9.0%
Total
0.4%
10.3%
10.4%
10.6%
4.1%
7.5%
9.7%
5.2%
8.3%
6.6%
Depreciation and software amortization
GN Hearing
-38
-41
-42
-41
-42
-41
-36
-38
-162
-157
GN Audio
-45
-48
-54
-47
-46
-45
-43
-47
-194
-181
Other*
-35
-37
-36
-21
-21
-27
-29
-136
-129
-213
Total
-118
-126
-132
-109
-109
-113
-108
-221
-485
-551
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Content
Quarterly reporting by segment (continued)
Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
YTD 2022
YTD 2023
DKK million
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(aud.)
(aud.)
EBITDA
GN Hearing
-32
47
123
477
95
209
226
181
615
711
GN Audio
190
580
494
229
209
251
338
400
1,493
1,198
Other*
-24
-2
4
-41
-22
-16
-26
-94
-63
-158
Total
134
625
621
665
282
444
538
487
2,045
1,751
EBITA
16
499
489
556
173
331
430
266
1,560
1,200
Amortization and impairment of acquired intangible assets
-103
-96
-125
-116
-102
-101
-99
-90
-440
-392
Gain (loss) on divestment of operations etc.
-1
-6
-
-2
-1
1
60
1
-9
61
Operating profit (loss)
-88
397
364
438
70
231
391
177
1,111
869
Share of profit (loss) in associates
17
5
-1
-2
-1
-46
-5
-12
19
-64
Financial items, net
-156
-77
-90
-82
-125
-129
-91
-117
-405
-462
Profit (loss) before tax
-227
325
273
354
-56
56
295
48
725
343
Tax on profit (loss)
49
-70
-58
-76
13
-13
-68
-9
-155
-77
Profit (loss)
-178
255
215
278
-43
43
227
39
570
266
Balance sheet
Inventories
GN Hearing
770
816
892
850
842
841
856
790
850
790
GN Audio
2,012
2,282
2,968
2,666
2,506
2,449
2,353
1,867
2,666
1,867
Total
2,782
3,098
3,860
3,516
3,348
3,290
3,209
2,657
3,516
2,657
Trade receivables
GN Hearing
1,144
1,262
1,266
1,442
1,446
1,398
1,451
1,489
1,442
1,489
GN Audio
1,975
2,890
2,729
2,589
2,314
2,429
2,827
2,953
2,589
2,953
Other*
2
2
-
-
-
-13
-
-
-
-
Total
3,121
4,154
3,995
4,031
3,760
3,814
4,278
4,442
4,031
4,442
Net working capital
GN Hearing
1,036
1,078
1,052
1,323
1,380
1,281
1,196
1,077
1,323
1,077
GN Audio
1,646
2,021
2,145
1,937
2,222
1,872
1,930
1,548
1,937
1,548
Other*
-165
-319
-259
-151
-43
-102
-120
16
-151
16
Total
2,517
2,780
2,938
3,109
3,559
3,051
3,006
2,641
3,109
2,641
Free cash flow excl. M&A
GN Hearing
-175
-326
60
64
-132
131
115
155
-377
269
GN Audio
-140
49
21
-21
-304
464
215
659
-91
1,034
Other*
-242
-135
-298
-148
-142
27
-51
-45
-823
-211
Total
-557
-412
-217
-105
-578
622
279
769
-1,291
1,092
Acquisitions and divestments of companies
-7,037
-216
-15
11
-36
-
441
-
-7,257
405
Free cash flow
-7,594
-628
-232
-94
-614
622
720
769
-8,548
1,497
* "Other" comprises Group Functions, GN Ejendomme and eliminations.
Note: Quartely splits have not been adjusted for the impacts, if any, of purchase price allocation finalisations.
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Content
Regional growth, Q4 2023
GN Hearing
GN Audio
Consolidated total
Q4 2023
Q4 2022
Q4 2023
Q4 2022
Q4 2023
Q4 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Europe - revenue
451
525
1,588
1,704
2,039
2,229
Organic growth
-3%
8%
-8%
9%
-7%
9%
FX growth
0%
0%
1%
0%
1%
0%
M&A growth
-11%
14%
0%
20%
-3%
18%
Revenue growth
-14%
22%
-7%
29%
-9%
27%
North America - revenue
996
839
1,019
1,109
2,015
1,948
Organic growth
24%
11%
-4%
-18%
8%
-5%
FX growth
-3%
15%
-4%
9%
-4%
12%
M&A growth
-2%
5%
0%
45%
-1%
27%
Revenue growth
19%
31%
-8%
36%
3%
34%
Rest of World - revenue
361
443
654
650
1,015
1,093
Organic growth
-16%
22%
7%
-9%
-2%
3%
FX growth
-3%
2%
-6%
4%
-5%
3%
M&A growth
0%
0%
0%
26%
0%
16%
Revenue growth
-19%
24%
1%
21%
-7%
22%
Total revenue
1,808
1,807
3,261
3,463
5,069
5,270
Organic growth
7%
14%
-4%
-3%
0%
3%
FX growth
-3%
6%
-2%
4%
-3%
5%
M&A growth
-4%
6%
0%
29%
-1%
21%
Revenue growth
0%
26%
-6%
30%
-4%
29%
Regional growth, YTD 2023
GN Hearing
GN Audio
Consolidated total
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Europe - revenue
1,887
1,794
5,473
5,936
7,360
7,730
Organic growth
5%
10%
-9%
-1%
-6%
1%
FX growth
-1%
1%
1%
0%
1%
0%
M&A growth
1%
11%
0%
13%
0%
13%
Revenue growth
5%
22%
-8%
12%
-5%
14%
North America - revenue
3,407
2,939
3,432
3,990
6,839
6,929
Organic growth
20%
0%
-11%
-19%
2%
-11%
FX growth
-2%
13%
-3%
10%
-2%
12%
M&A growth
-2%
3%
0%
35%
-1%
21%
Revenue growth
16%
16%
-14%
26%
-1%
22%
Rest of World - revenue
1,508
1,494
2,413
2,534
3,921
4,028
Organic growth
6%
8%
0%
-6%
2%
0%
FX growth
-5%
4%
-5%
7%
-5%
6%
M&A growth
0%
0%
0%
26%
0%
15%
Revenue growth
1%
12%
-5%
27%
-3%
21%
Total revenue
6,802
6,227
11,318
12,460
18,120
18,687
Organic growth
13%
5%
-8%
-7%
-1%
-3%
FX growth
-2%
7%
-1%
4%
-2%
5%
M&A growth
-1%
5%
0%
22%
0%
16%
Revenue growth
10%
17%
-9%
19%
-3%
18%
Regional growth composition
72/1
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GN Store Nord
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Content
Income statement
GN Hearing
GN Audio
Other*
Consolidated total
Q4 2023
Q4 2022
Q4 2023
Q4 2022
Q4 2023
Q4 2022
Q4 2023
Q4 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue
1,808
1,807
3,261
3,463
-
-
5,069
5,270
Production costs
-769
-613
-1,842
-2,087
-
-
-2,611
-2,700
Gross profit
1,039
1,194
1,419
1,376
-
-
2,458
2,570
Development costs
-167
-124
-290
-238
-17
-27
-474
-389
Selling and distribution costs
-517
-538
-570
-601
-
-
-1,087
-1,139
Management and administrative expenses
-218
-125
-206
-323
-214
-35
-638
-483
Other operating income and costs, net
6
29
-
-32
1
-
7
-3
EBITA
143
436
353
182
-230
-62
266
556
Amortization and impairment of acquired intangible assets
-6
-19
-84
-97
-
-
-90
-116
Gain (loss) on divestment of operations etc.
1
-2
-
-
-
-
1
-2
Operating profit (loss)
138
415
269
85
-230
-62
177
438
Share of profit (loss) in associates
-1
-2
-11
-
-
-
-12
-2
Financial items
-105
-65
-42
111
30
-128
-117
-82
Profit (loss) before tax
32
348
216
196
-200
-190
48
354
Tax on profit (loss)
9
-43
-
30
-18
-63
-9
-76
Profit (loss) for the period
41
305
216
226
-218
-253
39
278
Additional information
GN Hearing
GN Audio
Other*
Consolidated total
Q4 2023
Q4 2022
Q4 2023
Q4 2022
Q4 2023
Q4 2022
Q4 2023
Q4 2022
(DKK million)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
(unaud.)
Revenue distributed geographically
Denmark
12
29
65
132
-
-
77
161
Europe
439
496
1,523
1,572
-
-
1,962
2,068
North America
996
839
1,019
1,109
-
-
2,015
1,948
Rest of World
361
443
654
650
-
-
1,015
1,093
Revenue
1,808
1,807
3,261
3,463
-
-
5,069
5,270
Incurred development costs
-138
-170
-239
-374
-17
-29
-394
-573
Capitalized development costs
76
128
132
234
-
-
208
362
Amortization, impairment and depreciation of development
projects**
-49 -82 -183 -98 - 2 -232 -178
Expensed development costs
-111
-124
-290
-238
-17
-27
-418
-389
EBITDA
181
477
400
229
-94
-41
487
665
Depreciation and software amortization
-38
-41
-47
-47
-136
-21
-221
-109
EBITA
143
436
353
182
-230
-62
266
556
EBITA margin
7.9%
24.1%
10.8%
5.3%
N/A
N/A
5.2%
10.6%
Number of employees, end of period
4,349
4,852
2,462
2,666
354
373
7,165
7,891
Q4 segment disclosures
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Content
Consolidated income statement 74
Consolidated Statement of comprehensive income 74
Consolidated balance sheet at December 31 75
Consolidated statement of cash flow 76
Consolidated statement of equity 77
Consolidated
f
inancial
statements
GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
73/157
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Annual Report 2023 Financial Statements – Consolidated
Content
DKK million
Note
2023
2022
Revenue
2.2
18,120
18,687
Production costs
2.3, 2.4, 3.4, 3.6
-9,175
-9,555
Gross profit
8,945
9,132
Development costs
2.3, 2.4, 3.4
-1,546
-1,405
Selling and distribution costs
2.3, 2.4, 3.4
-4,397
-4,563
Management and administrative expenses
2.3, 2.4, 3.4, 5.8
-1,810
-1,587
Other operating income and costs, net
8
-17
EBITA*
1,200
1,560
Amortization and impairment of acquired intangible assets
2.6, 3.4
-392
-440
Gain (loss) on divestment of operations etc.
5.1
61
-9
Operating profit (loss)
869
1,111
Share of profit (loss) in associates
5.6
-64
19
Financial income
2.4, 4.5
164
256
Financial expenses
4.5
-626
-661
Profit (loss) before tax
343
725
Tax on profit (loss)
2.5
-77
-155
Profit (loss) for the year
266
570
Attributable to:
Non-controlling interests
38
59
Shareholders in GN Store Nord A/S
228
511
Earnings per share (EPS)
Earnings per share (EPS)
4.1
1.64
4.00
Earnings per share fully diluted (EPS diluted)
4.1
1.64
3.99
* Please refer to Key Ratio Definitions on page 132 for definition of EBITA
DKK million
Note
2023
2022
Profit (loss) for the year
266
570
Other comprehensive income
Items that will not be reclassified to the income statement
Actuarial gains (losses)
5.4
-2
7
Tax relating to actuarial gains (losses)
2.5
-2
-2
Items that may be reclassified subsequently to the income statement
Adjustment of cash flow hedges
4.3
51
-73
Foreign exchange adjustments, etc.
-216
258
Tax relating to other comprehensive income
2.5
-11
16
Other comprehensive income for the year, net of tax
-180
206
Total comprehensive income for the year
86
776
Attributable to:
Non-controlling interests
38
59
Shareholders in GN Store Nord A/S
48
717
Consolidated income
statement
Consolidated statement of
comprehensive income
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Content
DKK million
Note
2023
2022
Assets
Intangible assets
3.1, 3.4
16,925
17,546
Property, plant and equipment
3.2, 3.3, 3.4
1,036
1,255
Investments in associates
5.6
276
319
Deferred tax assets
2.5
494
491
Other non-current assets
3.5, 4.3, 5.4
1,727
1,612
Total non-current assets
20,458
21,223
Inventories
3.6
2,657
3,516
Trade receivables
3.7, 4.3
4,442
4,031
Tax receivables
69
107
Other receivables
854
722
Cash and cash equivalents
2,162
990
Total current assets
10,184
9,366
Total assets
30,642
30,589
Equity and Liabilities
Share capital
604
549
Other reserves
-3,798
-4,263
Retained earnings
12,781
10,514
Total equity
9,587
6,800
Bank loans and issued bonds, non-current
4.2, 4.3, 4.4
3,527
9,866
Lease liabilities, non-current
3.3, 4.3, 4.4
211
262
Pension obligations
5.4
9
7
Provisions, non-current
3.8
144
138
Deferred tax liabilities
2.5
745
915
Other non-current liabilities
4.3, 4.4
777
867
Total non-current liabilities
5,413
12,055
Bank loans and issued bonds, current
4.2, 4.3, 4.4
9,674
6,016
Lease liabilities, current
3.3, 4.3, 4.4
87
109
Trade payables
1,719
1,554
Tax payables
229
226
Provisions
3.8
340
223
Other current liabilities
4.3, 4.4
3,593
3,606
Total current liabilities
15,642
11,734
Total equity and liabilities
30,642
30,589
Consolidated balance sheet at December 31
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Annual Report 2023 Financial Statements – Consolidated
Content
DKK million
Note
2023
2022
Operating activities
Operating profit (loss)
869
1,111
Depreciation, amortization and impairment
3.4
1,729
1,534
Other non-cash adjustments
5.7
124
58
Cash flow from operating activities before changes in working capital
2,722
2,703
Change in inventories
756
-1,032
Change in receivables
-490
-393
Change in trade payables and other payables
172
132
Total changes in working capital
438
-1,293
Cash flow from operating activities before financial items and tax
3,160
1,410
Interest received
81
146
Interest etc. paid
-428
-744
Tax paid, net
2.5
-175
-185
Cash flow from operating activities
2,638
627
Investing activities
Development projects
3.1
-951
-1,005
Investments in intangible assets, excluding development projects
3.1
-388
-454
Investments in property, plant and equipment
3.2
-93
-209
Investments in other non-current assets
-131
-539
Disposal of intangible assets and property, plant and equipment
17
5
Disposal (repayment) of other non-current assets
-
284
Acquisition of companies/operations
5.1
-36
-7,257
Divestment of companies/operations
5.1
441
-
Cash flow from investing activities
-1,141
-9,175
Cash flow from operating and investing activities (free cash flow)
1,497
-8,548
DKK million
Note
2023
2022
Financing activities
Increase (decrease) of long-term loans
4.4
254
1,835
Increase (decrease) of short-term loans
4.4
-3,273
1,725
Paid dividends
-32
-208
Share-based payment (exercised)
47
22
Proceeds from share placement, net of costs
2,621
-
Other adjustments
71
-30
Cash flow from financing activities
-312
3,344
Net cash flow
1,185
-5,204
Cash and cash equivalents, beginning of period
990
6,208
Adjustment foreign currency, cash and cash equivalents
-13
-14
Cash and cash equivalents, end of period
2,162
990
Consolidated statement of cash flows
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Annual Report 2023 Financial Statements – Consolidated
Content
2023
Other reserves
DKK million
Share
capital
Foreign
exchange
adjust-
ments
Hedging
reserve
Treasury
shares
Proposed
dividends
for the
year
Retained
earnings
Equity,
share-
holders
in
GN Store
Nord A/S
Non-con-
trolling
interests
Total
equity
Balance at January 1, 2023
549
-846
-51
-3,366
-
10,514
6,800
-
6,800
Profit (loss) for the period
-
-
-
-
-
228
228
38
266
Actuarial gains (losses)
-
-
-
-
-
-2
-2
-
-2
Tax relating to actuarial gains
(losses)
-
-
-
-
-
-2
-2
-
-2
Adjustment of cash flow hedges
-
-
51
-
-
-
51
-
51
Foreign exchange adjustments, etc.
-
-216
-
-
-
-
-216
-
-216
Tax relating to other comprehensive
income
-
-
-11
-
-
-
-11
-
-11
Other comprehensive income for
the year
-
-216
40
-
-
-4
-180
-
-180
Total comprehensive income for
the year
-
-216
40
-
-
224
48
38
86
Increase in share capital, net of costs
55
-
-
-
-
2,021
2,076
-
2,076
Share-based payment (granted)
-
-
-
-
-
18
18
-
18
Share-based payment (exercised)
-
-
-
96
-
-69
27
-
27
Tax related to share-based incentive
plans
-
-
-
-
-
2
2
-
2
Treasury shares placement, net of
costs
-
-
-
545
-
-
545
-
545
Reclassification of non-controlling
interests by recognizing a put option
liability
-
-
-
-
-
71
71
-6
65
Paid dividends
-
-
-
-
-
-
-
-32
-32
Dividends, treasury shares
-
-
-
-
-
-
-
-
-
Balance at December 31, 2023
604
-1,062
-11
-2,725
-
12,781
9,587
-
9,587
* Equivalent to DKK 0.00 per share (2022: DKK 0.00 per share)
2022
Other reserves
DKK million
Share
capital
Foreign
exchange
adjust-
ments
Hedging
reserve
Treasury
shares
Proposed
dividends
for the
year
Retained
earnings
Equity,
share-
holders
in
GN Store
Nord A/S
Non-con-
trolling
interests
Total
equity
Balance at January 1, 2022
553
-1,104
6
-3,731
214
10,291
6,229
-
6,229
Profit (loss) for the period
-
-
-
-
-
511
511
59
570
Actuarial gains (losses)
-
-
-
-
-
7
7
-
7
Tax relating to actuarial gains
(losses)
-
-
-
-
-
-2
-2
-
-2
Adjustment of cash flow hedges
-
-
-73
-
-
-
-73
-
-73
Foreign exchange adjustments, etc.
-
258
-
-
-
-
258
-
258
Tax relating to other comprehen-
sive income
-
-
16
-
-
-
16
-
16
Other comprehensive income for
the year
-
258
-57
-
-
5
206
-
206
Total comprehensive income for
the year
-
258
-57
-
-
516
717
59
776
Cancellation of own shares
-4
-
-
297
-
-293
-
-
-
Share-based payment (granted)
-
-
-
-
-
111
111
-
111
Share-based payment (exercised)
-
-
-
68
-
-46
22
-
22
Tax related to share-based incen-
tive plans
-
-
-
-
-
7
7
-
7
Treasury shares placement, net of
costs
-
-
-
-
-
-
-
-
-
Reclassification of non-controlling
interests by recognizing a put op-
tion liability
-
-
-
-
-
-88
-88
-49
-137
Paid dividends
-
-
-
-
-198
-
-198
-10
-208
Dividends, treasury shares
-
-
-
-
-16
16
-
-
-
Balance at December 31, 2022
549
-846
-51
-3,366
-
10,514
6,800
-
6,800
Consolidated statement of changes in equity
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GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
Section 1 - Basis of preparation
Overview of the financial accounting policies in general and an
introduction to Management's key accounting estimates and
judgments.
1.1 General accounting policies 79
1.2 Significant accounting estimates and judgments 80
1.3 Non-IFRS measures 80
Section 2 - Results of the year
Insights into the results for the year, including operating segments,
employee costs and taxes.
2.1 Segment disclosures 82
2.2 Revenue and geographical information 86
2.3 Staff Costs 88
2.4 Government grants 88
2.5 Tax 89
2.6 Income statement classified by function 91
Section 3 - Operating assets and liabilities
Insights into the assets that form the basis for the activities in GN
Store Nord, and the related liabilities. Most of these are included in
invested capital and some in net working capital.
3.1 Intangible assets 93
3.2 Property, plant and equipment 96
3.3 Leases 98
3.4 Depreciation, amortization and impairment 99
3.5 Other non-current assets 100
3.6 Inventories 102
3.7 Trade receivables 103
3.8 Provisions 104
Section 4 - Capital structure and financing
items
Insight into GN Store Nord's capital structure and financial items as
well as financial risks.
4.1 Outstanding shares and treasury shares 106
4.2 Financial risks 107
4.3 Financial instruments 111
4.4 Liabilities from financing activities 116
4.5 Financial income and expenses 117
Section 5 - Other disclosures
Statutory notes and other disclosures.
5.1 Acquisition and divestment of companies and operations 119
5.2 Remuneration of the Board of Directors and Executive
Management 122
5.3 Share-based incentive plans 124
5.4 Pension obligations 127
5.5 Contingent liabilities 128
5.6 Investments in associates 129
5.7 Other non-cash adjustments 129
5.8 Fees to statutory auditors 129
5.9 Related parties 129
5.10 Events after the reporting period 129
Consolidated
notes
GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
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Annual Report 2023 Financial Statements – Consolidated
Content
1.1 General accounting policies
The annual report of GN Store Nord has been prepared in accordance
with IFRS Accounting Standards (IFRS) as adopted by the EU and the
Danish disclosure requirements for annual reports of listed companies.
The annual report has been prepared in accordance with the historical
cost convention, as modified by the revaluation of certain financial
instruments (including derivative financial instruments) at fair value.
The description of the accounting policies in the individual notes is part
of the complete description of GN Store Nord’s accounting policies.
New standards, interpretations and amendments
adopted by GN Store Nord
As of January 1, 2023, GN Store Nord adopted all relevant new or
revised International Financial Reporting Standards and IFRIC Interpre-
tations with effective date January 1, 2023 or earlier. The new or re-
vised standards and interpretations did not affect recognition and
measurement materially nor did they result in any material changes to
disclosures in the notes. Apart from this, the annual report is presented
in accordance with the accounting policies applied in previous years’
annual reports.
Accounting standards not yet adopted
A number of new standards, amendments to standards and interpreta-
tions are effective for annual periods beginning after January 1, 2024
and have not been applied in preparing this annual report. None of
these new standards, amendments to standards and interpretations
are expected to have significant impact on the financial statements of
GN Store Nord.
GN Store Nord will adopt new standards and interpretations as of the
effective dates.
Consolidated Financial Statements
The consolidated financial statements relate to the financial state-
ments of the parent company, GN Store Nord, and its subsidiaries as of
December 31, 2023. Control is achieved when the Group is exposed or
has rights to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the
investee.
Generally, there is a presumption that a majority of voting rights re-
sults in control. To support this presumption and when GN Store Nord
has less than a majority of the voting or similar rights of an investee,
GN Store Nord considers all relevant facts and circumstances in as-
sessing whether it has power over an investee.
Group companies are listed on pages 130-131. Enterprises that are not
subsidiaries, but where GN Store Nord exercises significant influence,
but where it does not have power to govern the financial and operating
policies, are considered associates. When assessing whether GN Store
Nord exercises control or significant influence, potential voting rights
that are substantive and options on acquisition of additional ownership
interests are taken into account.
The consolidated financial statements are prepared as a consolidation
of the financial statements of the parent company and those of the in-
dividual subsidiaries, all of which are presented in accordance with the
Group’s accounting policies. Intra-group income and expenses, share-
holdings, intra-group balances and dividends, and realized and unreal-
ized gains and losses on intra-group transactions are eliminated. On
consolidation, the carrying amount of shares held by the parent com-
pany in subsidiaries is set off against the subsidiaries’ equity.
Foreign Currency Translation
Functional Currency and Presentation Currency
Financial statement items for each of the reporting enterprises in the
Group are measured using the currency used in the primary financial
environment in which the reporting enterprise operates. Transactions
denominated in currencies other than the functional currency are con-
sidered transactions denominated in foreign currencies. The consoli-
dated financial statements are presented in Danish kroner (DKK),
which is the functional currency and presentation currency of the par-
ent company.
Translation of Transactions and Balances
On initial recognition, transactions denominated in foreign currencies
are translated to the functional currency at the exchange rates at the
transaction date. Foreign exchange differences arising between the
exchange rates at the transaction date and at the date of payment are
recognized in the income statement as financial income or financial
expenses. Receivables, payables and other monetary items denomi-
nated in foreign currencies are translated at the exchange rates at the
balance sheet date. The difference between the exchange rates at the
balance sheet date and at the date at which the receivable or payable
arose or was recognized in the latest annual report is recognized in the
income statement as financial income or financial expense.
Translation of Subsidiaries
On recognition in the consolidated financial statements of foreign enti-
ties with a functional currency other than GN Store Nord’s presenta-
tion currency, the income statements are translated at the exchange
rates at the transaction date, and the balance sheet items are trans-
lated at the exchange rates at the balance sheet date. An average ex-
change rate for the month is used as the exchange rate at the transac-
tion date to the extent that this does not significantly distort the
presentation of the underlying transactions. Foreign exchange differ-
ences arising on translation of the opening balance of equity of such
Section 1 - Basis of preparation
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GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
enterprises at the exchange rates at the balance sheet date and on
translation of the income statements from the exchange rates at the
transaction date to the exchange rates at the balance sheet date are
recognized in other comprehensive income.
Foreign exchange adjustment of balances with foreign entities that are
considered part of the investment in the entity is recognized in other
comprehensive income in the consolidated financial statements under
a separate translation reserve.
Cash Flow Statement
The cash flow statement is presented using the indirect method based
on the operating profit (loss). The cash flow statement shows the cash
flow from operating, investing and financing activities for the year and
the year’s changes in cash and cash equivalents as well as the cash and
cash equivalents at the beginning and end of the year. The cash flow
effect of acquisitions and disposals of enterprises is shown separately
in cash flows from investing activities. Cash flow from acquired enter-
prises is recognized in the cash flow statement from the acquisition
date. Cash flow from disposed of enterprises is recognized up until the
disposal date.
Cash flow from operating activities comprises cash flow from the
year’s operations adjusted for non-cash operating items and changes in
working capital. Working capital comprises current assets excluding
items stated as cash and cash equivalents and excluding tax receivable,
as well as current liabilities excluding bank loans, tax payable and pro-
visions.
Cash flow from investing activities comprises payments in connection
with acquisitions and disposals of enterprises and activities, acquisi-
tions and disposals of intangible assets, property, plant and equipment
and other non-current assets and acquisitions and disposals of securi-
ties that are not included in cash and cash equivalents.
Cash flow from financing activities comprises changes in the size or
composition of the share capital and related costs as well as the raising
of loans, repayment of interest-bearing debt, payment of the principal
portion of lease liabilities, acquisition and disposal of treasury shares
and payment of dividends to shareholders.
Cash and cash equivalents comprise cash and short-term marketable
securities with a term of three months or less and are subject to an
insignificant risk of changes in value.
IXBRL reporting
GN is required to file its annual report in the European Single Elec-
tronic Format (‘ESEF’). The primary statements and notes in the con-
solidated financial statements are tagged using inline eXtensible Busi-
ness Reporting Language (iXBRL). The iXBRL tags comply with the
ESEF taxonomy, which is included in the ESEF Regulation and devel-
oped based on the IFRS taxonomy published by the IFRS Foundation.
1.2 Significant accounting estimates
and judgments
The recognition of certain items of income and expenses and the deter-
mination of the carrying amount of certain assets and liabilities implies
making accounting estimates and judgments. Significant accounting
estimates and judgments comprise revenue recognition, computation
of amortization, depreciation and impairment, useful lives and remain-
ing useful lives of non-current assets. Furthermore, recognition of pen-
sion obligations and similar non-current obligations as well as provi-
sions requires significant accounting estimates and judgments.
The estimates used are based on assumptions, which by Management
are deemed reliable, but by nature are associated with uncertainty. The
assumptions may be incomplete or incorrect, and unexpected events
or circumstances may arise. Accordingly, the Company is subject to
risks and uncertainties that may lead to a situation where actual
results differ from estimates.
A description of significant accounting estimates and judgments is
included in the relevant notes:
Note Key accounting estimates Estimate/judgement and judgements 2.2 Revenue and geographical Revenue recognition Estimate information Judgement 2.5 Tax Measurement of deferred Estimate tax 3.1 Intangible assets Recognition and measure-Estimate ment of goodwill and devel-Judgement opment projects 3.5 Other non-current assets Ownership interest in Estimate dispensers 5.1 Acquisition and divest-Fair value of identifiable as-Estimate ment of companies and oper-sets and liabilities Judgement ations
1.3 Non-IFRS measures
This Annual Report includes financial measures which are not defined
by IFRS Accounting Standards. These measures are included because
they are used by GN Store Nord’s Management to analyze and manage
the business and to provide stakeholders with useful information on
the group’s financial position, performance and development. Please
refer to Key Ratio Definitions on page 132 for a definition of these
measures.
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Annual Report 2023 Financial Statements – Consolidated
Content
2.1
Segment disclosures 82
2.2 Revenue and geographical information 86
2.3 Staff Costs 88
2.4 Government grants 88
2.5 Tax 89
2.6 Income statement classified by function 91
Section 2 -
Results of the year
GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
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Annual Report 2023 Financial Statements – Consolidated
Content
2.1 Segment disclosures
Income statement 2023 Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total External revenue 6,802 11,318 - - 18,120 Internal revenue - - 738 -738 - Revenue 6,802 11,318 738 -738 18,120 Production costs -2,726 -6,449 - - -9,175 Gross profit 4,076 4,869 738 -738 8,945 Development costs -589 -894 -66 3 -1,546 Selling and distribution costs -2,202 -2,195 - - -4,397 Management and administrative expenses -740 -761 -1,047 738 -1,810 Other operating income and costs, net 9 -2 1 - 8 EBITA* 554 1,017 -374 3 1,200 Amortization and impairment of acquired intan-gible assets -56 -336 - - -392 Gain (loss) on divestment of operations etc. 62 -1 - - 61 Operating profit (loss) 560 680 -374 3 869 Share of profit (loss) in associates -18 -12 -34 - -64 Financial items -258 -287 83 - -462 Profit (loss) before tax 284 381 -325 3 343 Tax on profit (loss) -51 -39 14 -1 -77 Profit (loss) for the year 233 342 -311 2 266 Impairment losses and reversals regarding intan-gible assets and property, plant and equipment recognized in the income statement -60 -120 -135 - -315 Eliminations in the income statement primarily concern internal revenue, intersegment rent and management fee * Please refer to Key Ratio Definitions on page 132 for definition of EBITA
Income statement 2022 Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total External revenue 6,227 12,460 - - 18,687 Internal revenue - - 682 -682 - Revenue 6,227 12,460 682 -682 18,687 Production costs -2,320 -7,235 - - -9,555 Gross profit 3,907 5,225 682 -682 9,132 Development costs -550 -781 -80 6 -1,405 Selling and distribution costs -2,227 -2,336 - - -4,563 Management and administrative expenses -607 -866 -796 682 -1,587 Other operating income and costs, net -70 57 -4 - -17 0 EBITA* 453 1,299 -198 6 1,560 Amortization and impairment of acquired intan-gible assets -75 -365 - - -440 Gain (loss) on divestment of operations etc. -9 - - - -9 Operating profit (loss) 369 934 -198 6 1,111 Share of profit (loss) in associates 19 - - 19 Financial items -40 -71 -294 -405 Profit (loss) before tax 348 863 -492 6 725 Tax on profit (loss) -43 -112 1 -1 -155 Profit (loss) for the year 305 751 -491 5 570 Impairment losses and reversals regarding intan-gible assets and property, plant and equipment recognized in the income statement -3 -51 - - -54
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GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
2.1 Segment disclosures (Continued)
Other segment disclosures 2023 Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total Incurred development costs -627 -1.029 -66 - -1.722 Capitalized development costs 368 583 - - 951 Amortization, impairment and depreciation of -330 -448 3 - -775 development projects*** Expensed development costs -589 -894 -63 - -1.546 EBITDA** 711 1,198 -161 3 1,751 Depreciation and software amortization -157 -181 -213 - -551 EBITA* 554 1,017 -374 3 1,200 * Please refer to Key Ratio Definitions on page 145 for definition of EBITA ** Excluding gain (loss) on divestments of operations etc. but including amortization of development projects *** Does not include amortization and impairment of acquired intangible assets, as per definition of EBITA on page 132
Other segment disclosures 2022 Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total Incurred development costs -624 -1,075 -80 - -1,779 Capitalized development costs 399 606 - - 1,005 Amortization, impairment and depreciation of development projects*** -325 -312 - 6 -631 Expensed development costs -550 -781 -80 6 -1,405 EBITDA** 615 1,493 -69 6 2,045 Depreciation and software amortization -162 -194 -129 - -485 EBITA* 453 1,299 -198 6 1,560
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GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
2.1 Segment disclosures (Continued)
Balance sheet 2023 Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total Assets Goodwill 4,329 6,825 - - 11,154 Development projects 1,168 1,130 3 -3 2,298 Other intangible assets 221 1,558 1,694 - 3,473 Property, plant and equipment 342 286 408 - 1,036 Investments in associates 276 - - - 276 Deferred tax assets 563 280 -63 -286 494 Loans to dispensers and ownership interests 1,149 - 4 - 1,153 Other financial assets 566 8 - - 574 Total non-current assets 8,614 10,087 2,046 -289 20,458 Inventories 790 1,867 - - 2,657 Trade receivables 1,489 2,953 - - 4,442 Receivables from group companies* - 162 2,897 -3,059 - Tax receivables 59 87 98 -175 69 Other receivables 331 203 371 -51 854 Cash and cash equivalents 151 284 1,727 - 2,162 Total current assets 2,820 5,556 5,093 -3,285 10,184 Total assets 11,434 15,643 7,139 -3,574 30,642
Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total Equity and Liabilities Equity 5,665 10,677 -6,753 -2 9,587 Bank loans and issued bonds - 3 3,524 - 3.527 Lease liabilities, non-current 119 63 29 - 211 Pension obligations - 9 - - 9 Provisions, non-current 121 4 19 - 144 Deferred tax liabilities 302 640 89 -286 745 Other non-current liabilities 453 324 - - 777 Total non-current liabilities 995 1,043 3,661 -286 5,413 Bank loans - - 9,674 - 9,674 Lease liabilities, current 52 38 -3 - 87 Trade payables 363 1,211 145 - 1,719 Amounts owed to group companies* 2,897 - 162 -3,059 - Tax payables 125 270 10 -176 229 Provisions, current 167 140 33 - 340 Other current liabilities 1,170 2,264 210 -51 3,593 Total current liabilities 4,774 3,923 10,231 -3,286 15,642 Total equity and liabilities 11,434 15,643 7,139 -3,574 30,642 * Net amount Eliminations in the balance sheet primarily concern tax and intercompany balances
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GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
2.1 Segment disclosures (Continued)
Balance sheet 2022 Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total Assets Goodwill 4,710 6,860 - - 11,570 Development projects 1,094 1,781 - -3 2,872 Other intangible assets 448 1,752 905 -1 3,104 Property, plant and equipment 416 386 453 - 1,255 Investments in associates 273 13 33 - 319 Deferred tax assets 426 158 -49 -44 491 Loans to dispensers and ownership interests 1,101 - - - 1,101 Other financial assets 503 8 - - 511 Total non-current assets 8,971 10,958 1,342 -48 21,223 Inventories 850 2,666 - - 3,516 Trade receivables 1,442 2,589 - - 4,031 Receivables from group companies* - - 10,750 -10,750 - Tax receivables 58 124 120 -195 107 Other receivables 381 256 298 -213 722 Cash and cash equivalents 270 314 406 - 990 Total current assets 3,001 5,949 11,574 -11,158 9,366 Total assets 11,972 16,907 12,916 -11,206 30,589
Consolidated DKK million GN Hearing GN Audio Other GN Eliminations total Equity and Liabilities Equity 5,528 4,735 -3,460 -3 6,800 Bank loans and issued bonds - 6 9,860 - 9,866 Lease liabilities, non-current 167 57 38 - 262 Pension obligations - 7 - - 7 Provisions, non-current 76 58 4 - 138 Deferred tax liabilities 345 611 4 -45 915 Other non-current liabilities 479 388 - - 867 Total non-current liabilities 1,067 1,127 9,906 -45 12,055 Bank loans 1 10 6,005 - 6,016 Lease liabilities, current 56 39 14 - 109 Trade payables 303 1,113 138 - 1,554 Amounts owed to group companies* 3,709 7,041 - -10,750 - Tax payables 114 305 2 -195 226 Provisions, current 147 76 - - 223 Other current liabilities 1,047 2,461 311 -213 3,606 Total current liabilities 5,377 11,045 6,470 -11,158 11,734 Total equity and liabilities 11,972 16,907 12,916 -11,206 30,589 * Net amount Eliminations in the balance sheet primarily concern tax and intercompany balances
Accounting policies
Segment Information
GN Store Nord’s Management has identified GN Hearing and GN Audio as the
reportable segments in the Group. GN Hearing is operating within the hearing
instrument industry, primarily producing and
selling hearing instruments and
products related hereto. GN Audio is a leading supplier in the market for
audio
and collaboration solutions including headsets, video cameras and speaker-
phones for professional use and selected consumer products.
Segment information is based on the Group’s accounting policies. In the
Group, segment performance is evaluated on the basis of EBITA as defined
under key ratio definitions. Segment revenue and expense and segment as-
sets and liabilities comprise items dire
ctly attributable to a segment and
items that can be allocated to a segment on a reasonable basis.
Other GN primarily reflects cost from Group Functions, including new busi-
ness opportunities and research projects under the supervision of the GN
Store Nord Strategy
Committee, which are outside the reportable segments
in the Group. Furthermore, unallocated balance sheet items are included in
Other GN.
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GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
Content
2.2 Revenue and geographical information
Revenue disaggregation
Revenue is predominantly recognized at a point in time, and revenue
recognized over time is not significant. Revenue is in all material
respects related to sale of goods; hearing aid instruments, DKK 6,801
million (2022: DKK 6,227million) and audio and collaboration solutions,
DKK 11,529 million (2022: DKK 12,460 million). Revenue is attributed
to countries on the basis of the customer's location. Only the US
represent a material single country and constitutes the vast majority of
revenue in North America. One distributor in the Audio segment
comprises more than 10% of the group's total revenue amounting to
DKK 2,328 million (2022: DKK 2,811 million).
Geographical information on assets
Assets are attributed to countries based on the domicile location of the
asset. Apart from Denmark only the US represents a material single
country and constitutes the vast majority of assets in North America.
Contract liabilities
GN Store Nord has recognized the following revenue-related contract
liabilities:
DKK million 2023 2022 Deferred revenue related to pre-paid extended war-ranties (Other current liabilities and Other non-current liabilities) 203 195 Accrued rights of return (Other current liabilities)* 193 162 Contract liabilities at December 31 396 357 Revenue recognized, included in contract liabilities at the beginning of the year 265 194 * In 2022 the estimated refund liability recognized for the goods that are expected to be re-turned were reclassified from Provisions to Other current liabilities
Intangible assets and property, Revenue from contracts with customers plant and equipment GN Hearing GN Audio Consolidated total Consolidated total DKK million 2023 2022 2023 2022 2023 2022 2023 2022 Denmark 64 92 214 240 278 332 12,106 12,205 Europe 1,823 1,702 5,259 5,696 7,082 7,398 381 862 North America 3,407 2,939 3,432 3,990 6,839 6,929 5,130 5,344 Rest of World 1,508 1,494 2,413 2,534 3,921 4,028 340 390 Total 6,802 6,227 11,318 12,460 18,120 18,687 17,957 18,801 GN Hearing GN Audio 2023 2022 2023 2022 GN Hear-Core busi-Emerging GN Hear-Core busi-Emerging GN Audio GN Audio DKK million ing ness business ing ness business GN Audio organic SteelSeries GN Audio organic SteelSeries Revenue 6,802 6,535 267 6,227 6,022 205 11,318 8,716 2,602 12,460 10,143 2,317
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Content
2.2 Revenue and geographical information
(Continued)
Accounting policies
Revenue
Revenue from the sale of hearing aids and audio and collaboration solutions is
recognized in the income statement when the customer obtains control of the
goods. When considering at what point in time the customer obtains control
of the goods, a number of
indicators are considered, including whether:
•
GN Store Nord has a present right to payment for the goods
•
The customer has legal title to the goods
•
The customer has physical possession of the goods
•
The customer has the significant risks and rewards of ownership of the
goods
•
The customer has accepted the goods
In the majority of sales, the customer obtains control of the goods either
upon shipment from a distribution hub or upon delivery to the customer.
The amount of revenue recognized varies with discounts and rebates offered
to customers. Discounts and rebates are estimated based on the expected
amount to be provided to the customers and reduce revenues recognized.
Revenue is only recognized to the exte
nt that it is highly probable that a
significant reversal will not occur. Revenue from contracts in which GN Store
Nord provides on
-going access to research against a fee and in which the
counterparty reasonably expects that GN Store Nord will continue to perform
research is recognized over the access period.
When goods are sold with a right of return, a refund liability and a right to the
returned products are recognized as a provision and a current asset,
respectively. The refund liability is deducted from revenue and the right to the
returned products is off
set in cost of sales. The portion of goods sold that is
expected to be returned is estimated based on historical product returns data.
The estimated amounts of both returns, discounts and rebates are reassessed
at each reporting date.
GN Store Nord typically provides warranties for general repairs of defects
that existed at the time of sale, as required by law. These assurance
-type
warranties are accounted for as described in the accounting policies for
warranty provisions.
As part of a sales transaction, certain future services such as extended
warranties may be included. In case such service
-type warranties are sold, the
transaction price is allocated to the promised goods and services based on
stand
-alone selling prices. Observable prices are as far as possible used to
determine the stand
-alone selling prices but if such are not available a cost
plus a margin approach is used.
Extended warranties are initially recognized as contract liabilities in the
balance sheet and recognized in the income statement on a straight
-
line basis
over the term of the extended warranty period.
The typical payment terms for customers is between 30 and 60 days. GN
Store Nord does not expect to have contracts with payment terms exceeding
one year. As a consequence, the transaction prices are not adjusted for the
time value of money. Revenue is meas
ured excluding VAT, taxes and granted
cash and quantity discounts in relation to the sale and expected returns of
goods.
Production Costs
Production costs comprise costs, including depreciation and salaries, incurred
in generating the revenue for the year. Production costs include direct and in-
direct costs for raw materials and consumables, wages and salaries, inventory
write
-downs, maintenance and depreciation and impairment of production
plant and costs and expenses relating to the operation, administration and
management of factories.
Development Costs
Development costs comprise costs, salaries, and depreciation of operating
assets and equipment directly or indirectly
attributable to the Group’s
development activities. Furthermore, amortization and write
-down of
capitalized development projects are included as part of development costs.
Selling and Distribution Costs
Selling and distribution costs comprise costs relating to the sale and
distribution of products and services, including salaries, sales commissions,
advertising and marketing costs, depreciation and impairment, expected
losses on trade receivables etc.
Management and Administrative Expenses
Management and administrative expenses comprise expenses
incurred for management and administration. Administrative expenses
include office expenses, depreciation and impairment, etc.
Other Operating Income and Costs, net
Other operating income and costs comprise items secondary to the principal
activities of the enterprises.
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Content
2.2 Revenue and geographical information
(Continued)
2.3 Staff Costs
DKK million 2023 2022 Wages, salaries and remuneration 4,238 4,306 Pensions, defined benefit plans 2 5 Pensions, defined contribution plans 194 209 Other social security costs 438 449 Share-based incentives 22 111 Total 4,894 5,080 Included in: Production costs and change in payroll costs included 627 781 in inventories Development costs 676 981 Selling and distribution costs 2,630 2,461 Management and administrative expenses 961 857 Financial expenses - - Total 4,894 5,080
Average number of employees
Number of employees, year-end
7,165
7,891
For information regarding remuneration of the Board of Directors and Executive
Management, please refer to note 5.2 Remuneration of the Board of Directors and
Executive Management
2.4 Government grants
DKK million 2023 2022 Production costs - - Development costs -1 Selling and distribution costs -2 Management and administrative expenses 4 7 Financial income - - Total 4 10
Most of the government grant mainly consist of returned tax dedicated
to business and technology development purposes.
Significant accounting estimates and judgments
Revenue recognition
Certain contracts with customers include a right of return and volume re-
bates that give rise to variable consideration. In estimating the variable
consideration GN Store Nord is required to use either the expected value
method or the most likely amount method based on which method better
predicts the amount of consideration to which it will be entitled. Significant
accounting estimates and judgments involve determining the portion of ex-
pected returns of goods as well as the amount of discounts and rebates.
The portion of goods sold that is expected to be returned is estimated
based on historical product returns data.
In sales, where the customer obtains control of the goods upon delivery to
the customer, the significant judgments made in determining when the
customer obtains control of promised goods involve determining when a
customer has physical possession of the goods and when the customer has
accepted the goods due to uncertainty in transportation time.
Accounting policies
Government grants
Government grants are recognized when there is reasonable assurance
that the grant will be received and that all attached conditions will be
complied with. A grant relating to an expense item, is recognized on a
systematic basis over the periods that the related costs, for which it is
intended to compensate, are expensed. Government grants are presented
as a deduction from the relevant functional cost line items in the income
statement. Government grants that are receivable as compensation for
expenses or losses already incurred or for the purpose of giving immediate
financial support to the Group with no future related costs are recognized
in profit or loss in the period in which they become receivable.
7,435 7,871
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Content
2.5 Tax
Tax on profit (loss) DKK million 2023 2022 Tax on profit (loss) Current tax for the year -219-199 Deferred tax for the year 158 37 Effect of change in income tax rates 1 7 Withholding tax -15-4 Adjustment to current tax with respect to prior years -6 -8 Adjustment to deferred tax with respect to prior years 4 12 Total -77-155 Reconciliation of effective tax rate Danish tax rate 22.0% 22.0% Effect of tax rates in foreign jurisdictions 1.0% 0.9% Non-taxable income -4.3%-4.1%Non-deductible expenses 3.3%6.8% Other, including provisions for uncertain tax positions* 0.4%-4.2%Effective tax rate 22.4% 21.4% Tax relating to other comprehensive income Actuarial gains (losses) -2 -2 Adjustment of cash flow hedges -11 16 Total -13 14 * Other primarily relates to tax subsidies relating to R&D countered by provisions for uncer-tain tax positions.
Deferred Tax DKK million 2023 2022 Deferred tax, net Deferred tax at January 1, net -424 -13 Adjustment with respect to prior years 4 12 Effect of change in income tax rates 1 7 Addition of deferred tax on acquisition of enterprises --495 Deferred tax for the year recognized in profit (loss) for the year 158 37 Deferred tax for the year recognized in other comprehensive income -14 for the year 14 Tax related to share-based incentive plans -14 - Foreign exchange adjustments 38 14 Deferred tax at December 31, net -251-424 Deferred tax is recognized in the balance sheet as follows: Deferred tax assets 494 491 Deferred tax liabilities -745-915 Deferred tax at December 31, net -251-424 Deferred tax, net relates to: Intangible assets -999 -1,091 Property, plant and equipment 28 30 Other securities 6 - Current assets 179 122 Current liabilities 7 5 Intercompany liabilities -3 1 Tax loss carryforwards 138 177 Provisions 344 289 Other 49 43 Total -251 -424 Tax value of unrecognized tax assets Tax loss carryforwards 64 46 Other tax assets 173 104 Unrecognized tax assets at December 31 237 150
Unrecognized tax assets are based on the Group's expectations to the
future utilization of the tax assets. All tax losses carryforward have no
expiry date. Deferred tax, net includes DKK 65 million expected to be
utilized within 12 months (2022: DKK 42 million).
Repatriation of retained earnings from certain foreign subsidiaries,
however not planned or expected in the foreseeable future, may
trigger withholding tax liabilities up to DKK 39 million (2022:
DKK 39 million).
Accounting policies
Tax on profit (loss) for the year
The parent company is jointly taxed with all Danish subsidiaries. The cur-
rent Danish corporation tax is allocated between the jointly taxed compa-
nies in proportion to their taxable income. The jointly taxed companies are
taxed under the on-account tax scheme.
Tax for the year comprises current tax and changes in deferred tax for the
year. The tax expense relating to the profit (loss) for the year is recognized
in the income statement, and the tax expense relating to amounts recog-
nized in other comprehensive income is recognized in other comprehensive
income.
Current tax payable is recognized in current liabilities and deferred tax is
recognized in non-current liabilities. Tax receivable is recognized in current
assets and deferred tax assets are recognized in non-current assets.
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Content
2.5 Tax (Continued)
Approach to tax and taxes paid
The tax GN pays is an important part of our wider economic and social
impact and a key mechanism by which GN contributes to the develop-
ment of the countries where we operate. GN is committed to paying
tax responsibly, complying with tax regulations and acknowledges its
responsibility to stakeholders to meet expectations of good tax prac-
tices.
The GN Tax Policy is reviewed annually and approved by the Board of
Directors. Please refer to our tax policy on the GN website:
www.gn.com/taxpolicy.
We monitor and support the international initiatives building trust in
multinationals tax management and payments. In acting responsibly,
we disclose our main taxes paid on a regional level and for Denmark
separately. For the financial year 2023, our estimated corporate tax
payment amounts to DKK 175 million (2022: DKK 185 million).
GN is subject to taxation in the countries in which we operate. The tax
legislation and tax rates in these countries differ, impacting the tax we
pay. The allocation of taxes paid is based on the “principal model”,
which is in alignment with our operational and commercial activities
and is recognized by OECD as an acceptable transfer pricing model to
allocate taxable profits. The allocation is based on functions, assets,
and risks in every entity.
While acting responsibly, GN observes and complies with the applica-
ble international tax initiatives regarding reporting and disclosure re-
quirements. We continuously monitor the development to consider
our response to the proposed international disclosure requirements.
From 1 January 2024, GN will be subject to Global Minimum Tax
(OECD BEPS Pillar 2 rules). The rules are not expected to have a mate-
rial impact on the tax position of GN in 2024.
Accounting policies
Deferred Tax
Deferred tax assets, including the tax base of tax loss carryforwards, are
recognized at the expected value of their utilization, either as a set-off
against tax on future income or as a set-off against deferred tax liabilities
in the same legal tax entity and jurisdiction. Deferred tax is measured using
the balance sheet liability method on all temporary differences between
the carrying amount and the tax base of assets and liabilities. Deferred tax
is not recognized on goodwill unless this is deductible for tax purposes. De-
ferred tax is measured according to the tax rules and at the tax rates appli-
cable in the respective countries at the balance sheet date when the de-
ferred tax is expected to crystallize as current tax. The change in deferred
tax as a result of changes in tax rates is recognized in the income state-
ment. If a tax deduction on computation of the taxable income in Denmark
or in foreign jurisdictions is obtained as a result of share-based payment
programs, the tax benefit for the deduction is recognized directly in the
balance sheet. Deferred tax assets are subject to annual impairment tests
and are recognized only to the extent that it is probable that the assets will
be utilized.
Significant accounting estimates and judgments
Deferred tax
Management has made judgments in determining the Company’s valuation
of tax, deferred tax assets and deferred tax liabilities and the extent to
which deferred tax assets are recognized. GN Store Nord recognizes de-
ferred tax assets only to the extent that it is probable that taxable profit
will be available against which the temporary differences and unused tax
losses can be utilized.
Number of em-ployees, end of EBT IFRS (DKK Effective tax Tax paid (DKK Accrued tax Regions Nature of Activity period million) rate million) (DKK million) Denmark Principal 1,805 -126 34.0% 36 16 Europe R&D, Production, distribution and sales 830 305 32.0% 48 49 North America R&D, Production, distribution and sales 1,734 -132 47.0% 9 19 Rest of World R&D, Production, distribution and sales 2,796 296 28.0% 82 135 Total Total GN Group 7,165 343 22.4% 175 219 Eliminations and other adjust-ments - IFRS annual report 2023 Total GN Group 7,165 343 22.4% 175 219
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2.6 Income statement classified by function
The group presents the income statement based on a classification of
costs by function. However, in order to present EBITA in the income
statement, which is the measure of profit used by Management, amor-
tization and impairment of acquired intangible assets are separated
from the individual functions and presented as a separate line item. If
amortization and impairment of acquired intangible assets are allo-
cated to the individual line items by function, the income statement is
presented as follows:
DKK million 2023 2022 Revenue 18,120 18,687 Production costs -9,175 -9,555 Gross profit 8,945 9,132 Development costs -1,666 -1,633 Selling and distribution costs -4,613 -4,775 Management and administrative expenses -1,786 -1,587 Other operating income and costs, net -72 -17 Gain (loss) on divestment of operations etc. 61 -9 Operating profit (loss) 869 1,111 In the above income statement amortization and im-pairment of acquired intangible assets has been allo-cated to functions as follows: Development costs -176 -228 Selling and distribution costs -216 -212 Amortization and impairment of acquired intangible -392 -440 assets
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Introduction
Insights into the assets that form the basis for the activities in GN
Store Nord, and the related liabilities. Most of these are included in
invested capital and some in net working capital.
3.1 Intangible assets 93
3.2 Property, plant and equipment 96
3.3 Leases 98
3.4 Depreciation, amortization and impairment 99
3.5 Other non-current assets 100
3.6 Inventories 102
3.7 Trade receivables 103
3.8 Provisions 104
Section 3 -
Operating assets and liabilities
GN Store Nord
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Content
3.1 Intangible assets
The carrying amount of In-house development projects and software
include development in progress of DKK 316 million and DKK 651 mil-
lion respectively (2022: DKK 565 million and DKK 735 million).
Goodwill
There were no additions during the year in GN Hearing (2022: DKK 306
million) nor GN Audio (2022: DKK 5,580 million) cf. note 5.1 Acquisi-
tion and divestment of companies and operations.
Management performs an annual impairment test of the carrying
amount of goodwill. The impairment test covers the Group's cash-
generating units (CGU) to which the carrying amount of goodwill is
allocated.
Acquired devel-In-house devel-opment pro-opment jects and soft-Customer rela-Patents and DKK million Goodwill projects ware tionships Software rights Other Total Cost at January 1 11,570 6,030 903 1,449 1,734 965 1,401 24,052 Additions on company acquisitions - - - - - - - - Additions - 951 - - 361 - 27 1,339 Disposals -246 - - -212 - - - -458 Foreign exchange adjustments -170 - - -14 -5 -7 -7 -203 Cost at December 31 11,154 6,981 903 1,223 2,090 958 1,421 24,730 Amortization and impairment at January 1 - -3,922 -139 -466 -774 -647 -558 -6,506 Amortization - -582 -87 -114 -80 -89 -102 -1,054 Disposals - - - 36 - - 36 Impairment - -180 - - -135 - - -315 Foreign exchange adjustments - - - 14 5 7 8 34 Amortization and impairment at December 31 - -4,684 -226 -530 -984 -729 -652 -7,805 Carrying amount at December 31, 2023 11,154 2,297 677 693 1,106 229 769 16,925 Cost at January 1 5,422 5,415 - 526 1,305 828 693 14,189 Additions on company acquisitions 5,886 - 903 958 - 128 763 8,638 Additions - 1,005 - - 429 - 24 1,458 Disposals -22 -390 - -67 -5 -3 -100 -587 Foreign exchange adjustments 284 - - 32 5 12 21 354 Cost at December 31 11,570 6,030 903 1,449 1,734 965 1,401 24,052 Amortization and impairment at January 1 - -3,702 - -372 -688 -552 -539 -5,853 Amortization - -583 -119 -123 -85 -89 -89 -1,088 Disposals - 390 - 52 5 3 86 536 Impairment - -27 -20 - - - - -47 Foreign exchange adjustments - - - -23 -6 -9 -16 -54 Amortization and impairment at December 31 - -3,922 -139 -466 -774 -647 -558 -6,506 Carrying amount at December 31, 2022 11,570 2,108 764 983 960 318 843 17,546
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3.1 Intangible assets (Continued)
Carrying amount Pre-tax discount Weighted average of goodwill rate cost of capital DKK million % % 2023 2022 2023 2022 2023 2022 CGUs GN Hearing 4,329 4,710 8.7 8.5 8.3 8.1 GN Audio 6,825 6,860 9.3 9.2 8.8 8.8 Total 11,154 11,570
In the impairment test, the discounted future cash flows of each CGU
(the value in use) were compared with the carrying amounts. Future
cash flows are based on the budget for 2024, market forecasts for
2024 – 2027, strategy plans, etc. approved by the Board of Directors.
Budgets and strategy plans are based on specific assumptions for the
individual CGU regarding sales, operating profit, working capital, in-
vestments in non-current assets, etc. The calculations apply expected
growth in the terminal period of 2.0% p.a. for both CGU’s (2022: 2.0%
p.a.)
The long-term market growth in the Hearing Aid and Audio industries
is driven by the following main factors:
GN Hearing:
• Shifting demographics with a growing elderly and more affluent
population
• Intensified noise pollution driving the increased prevalence of hear-
ing loss
• Increased penetration rates as more people with a hearing loss will
use hearing aids in the future, and
• Increased use of two hearing aids, which is relatively common to-
day, instead of only one
GN Audio:
• A significant part of our future growth is expected to come from
the increased penetration of professional headsets
• UC technology has the potential to reduce travel cost and carbon
footprint by the companies that adopt the technology
• Continued transition from desk phones to Unified Communications
• The fast-growing market for premium software-enabled gaming
gear
• Video playing an increasingly larger role in future experiences
• Increasing flexibility requirements by office-workers, demands for
productivity, focus on cloud-based solutions, and general technol-
ogy improvements
The expected revenue growth in the GN Hearing segment and
GN Audio segment is based on the current differentiated product offer-
ing with unique technology as well as future product launches. Based
on the impairment test and related assumptions, Management has not
identified any goodwill impairment at December 31, 2023. No likely
change in the assumptions applied will result in an impairment.
Development projects and software
In-progress and completed development projects comprise develop-
ment and design of hearing instruments and audio and collaboration
solutions. Most development projects are expected to be completed in
the coming years, after which product sales and marketing can be com-
menced. Management performs at least one annual impairment test of
the carrying amount of recognized development costs. The recovera-
ble amount is assessed based on sales forecasts. During the year, im-
pairments of DKK 180 million related to projects were recognized. In
Management's assessments, the recoverable amount exceeds the car-
rying amount at December 31, 2023.
Software comprises development, design and test of production, plan-
ning software and reporting systems, business intelligence etc.
Implementation of these systems is expected to optimize internal pro-
cedures and processes. During the year, impairments of DKK 135 mil-
lion related to software were recognized. In 2023, Management as-
sessed that the expected useful lives were reflected in the carrying
amounts at
December 31, 2023.
The Group’s move to one company geared towards capturing com-
pany-wide synergies which will support and accelerate margin im-
provements across the Group. In order to capture these synergies, the
group has streamlined processes including refined product and soft-
ware focus resulting in the aforementioned development projects and
software impairments recognized in the 2023 financial year.
Customer relationships
Customer relationships primarily comprise acquired customer relation-
ships. The most significant customer relationship relates to the acquisi-
tion of SteelSeries, Audigy, BlueParrot, and US Beltone.
Patents and rights
Patents and rights primarily comprise acquired patents and rights. The
most significant patents and rights relate to technologies for the de-
velopment of new hearing instruments for GN Hearing and rights to
the use of certain technologies for development of headsets and video
communications solutions.
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Content
3.1 Intangible assets (Continued)
Other
The Group's other intangible assets comprise DKK 693 million (2022:
DKK 768 million) related to trademarks, DKK 66 million (2022: DKK 47
million) related to supply agreements and DKK 2 million (2022: DKK 3
million) related to know-how. In Management's assessments, the re-
coverable amount exceeds the carrying amount at December 31, 2023.
Accounting policies
Goodwill
At the acquisition date goodwill is recognized in the balance sheet at
cost as
described under Business combinations (note 5.1). Subsequently, goodwill is
measured at cost less accumulated impairment losses. Goodwill is not
amortized but is tested for impairment at least once a year. The carrying
amount of goodwill is allocat
ed to the Group’s cash-generating units at the
acquisition date. Identification of cash
-generating units is based on how
Management monitors the operation in the Management reporting.
As a result of the integration of acquired enterprises in the existing group,
Management assesses that the smallest cash
-generating units to which the
carrying amount of goodwill can be allocated are: GN Hearing and GN Audio.
Development projects, Software, Patents, Licenses and
Other Intangible Assets
Intangible assets are measured at cost less accumulated amortization and im-
pairment. Amortization is provided on a straight
-line basis over the expected
useful lives of the assets. When changing the depreciation period, the effect
on the depreciation is re
cognized prospectively as a change in accounting esti-
mates. Amortization and impairment is recognized in the income statement
as production costs, development costs, distribution costs and administrative
expenses.
The expected useful lives are as follows: Completed development projects 1-5 years Software 3-10 years Customer relationships up to 10 years
Patents, licenses, trademarks and other
intellectual property rights
up to 20 years
Development projects that are clearly defined and identifiable, where the
technical utilization degree, sufficient resources and a potential future market
or development opportunities in the Company is evidenced, and where
GN
Store Nord intends to produce, market or use the project, are recognized
as intangible assets if it is p
robable that costs incurred will be covered by fu-
ture earnings. The cost of such development projects includes direct wages,
salaries, materials and other direct and indirect costs attributable to the de-
velopment projects. Amortization and write
-down of such capitalized devel-
opment projects are started at the date of completion and are included in de-
velopment costs. Other development costs are recognized in the income
statement as incurred.
Gains or losses on the disposal of intangible assets are determined as the
difference between the selling price less selling costs and the carrying amount
at the disposal date, and are recognized in the income statement as other
operating income or other o
perating costs, respectively.
Impairment of Goodwill and
in-progress development projects
Goodwill is subject to at least one annual impairment test. Similarly, in
-
progress development projects are tested for impairment at least annually.
An impairment test is also performed whenever there is an indication that an
asset may be impaired.
The carrying amount of goodwill is tested for impairment together with the
other non
-current assets in the cash-generating unit to which the goodwill is
allocated. Goodwill is written down to the recoverable amount if the carrying
amount is higher than the
computed recoverable amount. The recoverable
amount is computed as the present value of the expected future net cash
flows from the enterprises or activities to which the goodwill is allocated.
Recognition of impairment losses in the income statement
An impairment loss is recognized if the carrying amount of an asset or its
cash
-generating unit exceeds the recoverable amount of the asset or the
cash
-generating unit. Impairment of goodwill is recognized in a separate line
item in the income statement.
Impairment of goodwill is not reversed.
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3.1 Intangible assets (Continued)
3.2 Property, plant and equipment
Significant accounting
estimates and judgments
Goodwill
Determining whether goodwill is impaired requires a comparison of the
recoverable amount with the carrying amount. The recoverable amount is
determined as the net present value of the future cash flows expected to
arise from the cash generating unit to which goodwill is allocated.
Development projects
Development projects are measured at cost less accumulated amortization
and impairment. An impairment test is performed of the carrying amount
of recognized development projects. The impairment test is based on
assumptions regarding strategy, product life cycle, market conditions,
discount rates and budgets, etc., after the project has been completed and
production has commenced. If market-related assumptions etc., are
changed, development projects may have to be written down.
Management examines and assesses the underlying assumptions when
determining whether or not the carrying amount should be written down.
In addition, Management continuously assess the useful lives of its
products to ensure that amortization of development projects reflects the
useful lives.
Factory Operating Assets and office Leasehold Plant and assets and under DKK million buildings improvements machinery equipment construction Total Cost at January 1 671 236 958 798 14 2,677 Additions on company acquisitions - - - - - - Additions 11 8 31 41 2 93 Disposals - -29 -48 -60 - -137 Transfers - - 2 - -2 - Foreign exchange adjustments -3 -5 -8 -6 - -22 Cost at December 31 679 210 935 773 14 2,611 Depreciation and impairment at January 1 -256 -170 -716 -636 - -1,778 Depreciation -27 -18 -115 -61 - -221 Impairment - - - - - - Disposals - 29 48 48 - 125 Transfers - - - - - - Foreign exchange adjustments 2 2 1 5 - 10 Depreciation and impairment at December 31 -281 -157 -782 -644 - -1,864 Carrying amount at December 31, 2023 398 53 153 129 14 747 Leased assets, c.f. note 3.3 272 17 289 Total carrying amount at December 31, 2023 670 53 153 146 14 1,036 Cost at January 1 636 202 923 712 18 2,491 Additions on company acquisitions 15 34 - 25 - 74 Additions 29 - 12 82 86 209 Disposals -8 -5 -70 -25 - -108 Transfers - - 90 -4 -90 -4 Foreign exchange adjustments -1 5 3 8 - 15 Cost at December 31 671 236 958 798 14 2,677 Depreciation and impairment at January 1 -240 -151 -649 -576 - -1,616 Depreciation -24 -19 -132 -66 - -241 Impairment -4 -4 Disposals 7 3 68 17 - 95 Transfers - - - - - - Foreign exchange adjustments 1 -3 -3 -7 - -12 Depreciation and impairment at December 31 -256 -170 -716 -636 - -1,778 Carrying amount at December 31, 2022 415 66 242 162 14 899 Leased assets, c.f. note 3.3 324 32 356 Total carrying amount at December 31, 2022 739 66 242 194 14 1,255
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3.2 Property, plant and equipment
(Continued)
Accounting policies
Property, plant and equipment
Land and buildings, plant and machinery and fixtures and fittings, other plant
and equipment are measured at cost less accumulated depreciation and
impairment losses. Cost comprises the purchase price and costs of materials,
components, suppliers, direct
wages and salaries and indirect production
costs until the date when the asset is available for use. Liabilities related to
dismantling and removing the asset and restoring the site on which the asset
is located are added to the cost. Where individual comp
onents of an item of
property, plant and equipment have different useful lives, they are accounted
for as separate items, which are depreciated separately.
Depreciation is provided on a straight
-line basis over the expected useful lives
of property, plant and equipment.
The expected useful lives are as follows:
Buildings and installations (land is not depreciated)10-50 years Leasehold improvements 5-20 years Plant and machinery 1-7 years Operating assets and equipment 2-7 years
The basis of depreciation is calculated as the residual value of the asset less
impairment losses. The residual value is determined at the acquisition date
and reassessed annually. If the residual value exceeds the carrying amount,
depreciation is disconti
nued. When changing the depreciation period or the
residual value, the effect on the depreciation is recognized prospectively as a
change in accounting estimates. Depreciation and impairment is recognized in
the income statement as production costs, develo
pment costs, distribution
costs and administrative expenses.
Expenses for repairs and maintenance of property, plant and equipment are
included in the income statement. Gains or losses on disposal or scrapping of
an item of property, plant and equipment are determined as the difference
between the sales price reduced by costs related to dismantling and removing
the asset, selling costs and costs related to restoring the site on which the
asset is located and the carrying amount. Gains or losses are recognized in the
income statement as Other operating income or Othe
r operating costs,
respectively.
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Content
3.3 Leases
GN Store Nord’s leases mainly consist of property leases of e.g. offices
but also include cars and office equipment. Rental contracts are typi-
cally made for fixed periods but may have extension options. Contracts
may contain both lease and non-lease components. In such cases the
consideration in the contract is allocated to the lease and non-lease
components based on their relative stand-alone prices. Lease terms are
negotiated on an individual basis and contain a wide range of different
terms and conditions.
Lease liabilities DKK million 2023 2022 Contractual maturity analysis of lease liabilities: Less than one year 112 130 Between one and three years 140 164 More than three years 69 94 Total 321 388 The maturity analysis is based on non-discounted cash flows. Amounts expensed in the income statement and total cash outflow DKK million 2023 2022 Interest expense on lease liabilities 8 6 Expenses for low-value assets and short-term leases 7 10 Cash outflow re. lease liabilities 144 153
Right-of-use assets from leases included in property, plant and equipment
2023 2022 Factory Operating Factory Operating and office assets and and office assets and DKK million buildings equipment Total buildings equipment Total Carrying amount at January 1 324 32 356 385 40 425 Additions on company acquisitions - - - 56 - 56 Additions 51 45 96 18 21 39 Remeasurements 14 -30 -16 -16 - -16 Depreciation -103 -30 -133 -122 -29 -151 Impairment -6 - -6 -3 - -3 Foreign exchange adjustments -8 - -8 6 - 6 Carrying amount at December 31 272 17 289 324 32 356
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Content
3.3 Leases (continued)
3.4 Depreciation, amortization
and impairment
DKK million
2023
2022
Depreciation, amortization and impairment for the year of prop-
erty, plant and equipment (incl. leased assets) and intangible as-
sets are recognized in the income statement as follows:
Production costs
-154
-156
Development costs -776 -632 Selling and distribution costs -86 -103 Management and administrative expenses -321 -203 Amortization and impairment of acquired intangible assets -392 -440 Total -1.729 -1.534 Amortization of intangible assets is recognized in the income state-ment as follows: Production costs - - Development costs -584 -585 Selling and distribution costs -3 -2 Management and administrative expenses -78 -81 Amortization and impairment of acquired intangible assets -389 -420 Total -1.054 -1.088 Impairment of intangible assets is recognized in the income state-ment as follows: Development costs -180 -27 Management and administrative expenses -132 - Amortization and impairment of acquired intangible assets -3 -20 Total -315 -47
Accounting policies
Leases
Leases are recognized as a right
-of-use asset and a corresponding liability at
the date at which the leased asset is available for use by the group. Each lease
payment is allocated between the liability and finance cost. The finance cost
is charged to prof
it or loss over the lease period so as to produce a constant
periodic rate of interest on the remaining balance of the liability for each
period. The right
-of use asset is depreciated over the shorter of the asset's
useful life and the lease term on a stra
ight-line basis.
Assets and liabilities arising from a lease are initially measured on a present
value basis. Lease liabilities include the net present value of the following
lease payments:
•
fixed payments (including in-substance fixed payments), less any lease
incentives receivable
•
variable lease payment that are based on an index or a rate
•
amounts expected to be payable by the lessee under residual value
guarantees
•
the exercise price of a purchase option if the lessee is reasonably certain
to exercise that option, and
•
payments of penalties for terminating the lease, if the lease term reflects
the lessee exercising that option
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be determined, the lessee’s incremental borrowing
rate is used, being the rate that the lessee would have to pay to borrow the
funds necessary to obtain an
asset of similar value in a similar economic
environment with similar terms and conditions. Right
-of-use assets are
measured at cost comprising the following:
•
the amount of the initial measurement of lease liability
•
any lease payments made at or before the commencement date less any
lease incentives received
•
any initial direct costs, and
•
restoration costs
Payments associated with short
-term leases and leases of low-value assets
are recognized on a straight
-line basis as an expense in profit or loss. Short-
term leases have a lease term of 12 months or less. Low
-value assets
comprise e.g. IT
-equipment and small items of office furniture.
Extension and termination options
Extension and termination options are included in a number of leases across
the group.
These terms are used to maximize operational flexibility.
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Content
3.5 Other non-current assets
DKK million 2023 2022 Loans to dispensers of GN Hearing products 770 702 Pre-paid discounts 246 262 Ownership interests 136 137 RAP, SIP and DCP 349 325 Pension assets 33 29 Other 193 157 Total 1,727 1,612
RAP (Retirement Advantage Plan) and SIP (Savings and Investment
Plan) are programs in which customers earn funds based on purchases
made. DCP (Deferred Compensation Plan) is a program in which Man-
agement in certain foreign subsidiaries may choose to defer compensa-
tion. The amounts invested by the Group on behalf of customers and
Management are recognized in Other non-current assets. The Group’s
liabilities related to the programs are recognized in Other non-current
liabilities at DKK 265 million (2022: DKK 255 million).
All ownership interests are accounted for at fair value through profit or
loss.
Dispenser loans are provided to dispensers of GN Hearing products in
order to support their future growth. The majority of dispenser loans is
related to dispensers in the US. GN Hearing's assessment of credit risk
associated with non-current loans to dispensers depends primarily on
change in payment behavior and current economic conditions. Before a
loan is extended, the creditworthiness of the individual dispenser is an-
alyzed. Calculating the expected credit loss rates, GN Store Nord con-
siders historical loss rates for each category of dispensers, and provides
for credit losses against loans to customers by comparing the develop-
ment in the actual loan balance to the agreed development in the loan
balance.
The table below illustrates how the 12-month and lifetime expected
credit loss are calculated for dispenser loans and how the credit risk ex-
posure on dispenser loans are grouped by GN Store Nord’s internal
credit rating:
2023 2022 Estimated gross Estimated gross carrying Carrying carrying Carrying Expected credit amount at amount (net of Expected credit amount at amount (net of loss rate default loss allowance) loss rate default loss allowance) GN Store Nord internal credit rating % DKK million DKK million % DKK million DKK million Performing 12-month expected credit loss 2% 782 770 1% 712 702 Underperforming Lifetime expected credit losses 100% 204 - 100% 216 - Write-off Assets derecognized through the income statement 100% 12 - 100% 24 - Total dispenser loans at December 31 998 770 952 702
The 12-month and lifetime expected credit losses have developed as follows: Performing Underperforming DKK million (12 month ECL) (lifetime ECL) Total Opening loss allowance as at January 1, 2023 -10 -216 -226 Transferred to underperforming (lifetime ECL) - 3 3 New dispenser loans, net -3 - -3 Write-off - 12 12 Changes in model/risk parameters - - - Foreign exchange adjustments and other changes 1 -3 -2 Closing loss allowance as at December 31, 2023 -12 -204 -216 Opening loss allowance as at January 1, 2022 -16 -143 -159 Transferred to underperforming (lifetime ECL) 3 -92 -89 New dispenser loans 3 - 3 Write-off - 24 24 Changes in model/risk parameters - - - Foreign exchange adjustments and other changes - -5 -5 Closing loss allowance as at December 31, 2022 -10 -216 -226
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3.5 Other non-current assets (Continued)
Accounting policies
Loans to dispensers
Loans to
dispensers and other receivables are measured at amortized cost
less an allowance for expected credit losses. Both loans to dispensers and
other receivables are held for collection of contractual cash flows and those
cash flows represent solely payments of
principal and interest.
Ownership Interests and savings plans
Ownership interests between 20% and 50% in unlisted enterprises in which
the Group does not exercise significant influence on the financial and operat-
ing policies are recognized under non
-current assets at fair value. Gains and
losses on such ownership interests are either recorded under financial items in
the income statement or in other comprehensive income. This depends on the
Group’s irrevocable election at the time of initial recognition to account for
the ownership interests at fair value through prof
it (loss) or other comprehen-
sive income.
Where the Group has elected to present fair value gains and losses on owner-
ship interests in other comprehensive income, there is no subsequent reclassi-
fication of fair value gains and losses to the income statement following the
derecognition of the inves
tment. Changes in the fair value of ownership inter-
ests at fair value though profit or loss are recognized in financial items in the
income statement.
The savings plans RAP, SIP and DCP are measured at fair value through profit
or loss.
Impairment of dispenser loans
Loss allowances on dispenser loans are measured equal to 12
-month
expected credit losses, if the credit risk has not increased significantly since
initial recognition. If the credit risk has increased significantly, the loss
Significant accounting estimates and judgments
Financial support arrangements
GN Store Nord grants loans to dispensers and acquires ownership interests
in dispensers. The agreements are typically comprehensive, complex and
cover several aspects of the relationship between the parties. Management
assesses the recognition and classification of income and expenses for each
of these agreements, including whether the agreement represent a dis-
count on future sales. Management also assesses whether current eco-
nomic conditions and changes in customers' payment behavior could indi-
cate impairment of the outstanding balances.
Ownership Interests
When considering whether or not GN Hearing exercises significant influ-
ence in unlisted enterprises a number of judgments are made. These judg-
ments include considering:
• Representation on the board of directors
• Participation in policy-making processes
• Material transactions between the entity and GN
• Interchange of managerial personnel
• Provision of essential technical information
allowance are measured at an amount equal to lifetime expected credit
losses.
The calculation of 12
-month expected credit losses on dispenser loans are
based on a weighted average of historical annual losses on customers.
Payment plans are agreed with dispensers when issuing loans to these. The
credit risk of loans to dispensers is
considered to have increased significantly
since initial recognition when actual loan balances differ from the agreed
development in loan balances with more than 40%. At this point the loan is
considered to be in default and credit impaired.
The calculation of lifetime expected credit losses on dispenser loans is based
on the difference between the development in the actual loan balances and
the agreed development in loan balances. The allowances are increased in
steps if the difference betwee
n the actual loan balance and the agreed devel-
opment in loan balances increases.
Indicators that there is no reasonable expectation of recovery of a dispenser
loan include bankruptcy, change of control and change in the payment
behavior or financial situation of the dispenser. In such cases a full or partial
write
-off of a dispenser loan will be recognized by derecognizing the asset.
Where recoveries are made, these are recognized in the income statement.
Impairment of Pre
-paid discounts
The carrying amount of Pre
-paid discounts is subject to an annual test for
indications of impairment. When there is an indication that assets may be
impaired, the recoverable amount of the asset is determined.
Recognition of impairment losses in the income statement
Impairment losses are recognized in the income statement in the relevant
functional line items. Impairment of dispenser loans are reversed only to the
extent of changes in the assumptions and estimates underlying the impair-
ment calculation.
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Content
3.6 Inventories
DKK million 2023 2022 Raw materials and consumables 622 735 Work in progress 27 27 Finished goods and merchandise 2,008 2,754 Total 2,657 3,516 The above includes write-downs amounting to -295 -230 Costs of goods sold included in Production Costs -8,519 -8,934
Accounting policies
Inventories
Inventories are measured at cost in accordance with the FIFO-principle.
Inventories in GN Hearing are measured at cost using the standard cost
method. Standard costs take into account normal levels of raw materials
and consumables, staff costs, efficiency and capacity utilization. Standard
costs are reviewed regularly and adjusted in accordance with the FIFO-
principle.
Raw materials and goods for resale are measured at cost, comprising pur-
chase price plus delivery costs.
Work in progress and finished goods are measured at cost, comprising the
cost of direct materials, wages and salaries and indirect production over-
heads. Indirect production overheads comprise indirect materials, wages and
salaries, maintenance and depreciation of production machinery, buildings
and equipment as well as factory administration and management.
Where the net realizable value is lower than cost, inventories are written
down to this lower value. The net realizable value of inventories is calcu-
lated as the sales amount less costs of completion and costs necessary to
make the sale.
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3.7 Trade receivables
The loss allowance included in total trade receivables, based on the
above aging profile and expected loss rates, have developed as follows:
DKK million 2023 2022 Loss allowance at January 1 -174 -181 Increase in loss allowance during the year -38 -20 Trade receivables written off as uncollectible 10 6 Reversal of unused loss allowance 16 26 Foreign exchange adjustments 1 -5 Loss allowance at December 31 -185 -174
The total loss allowance of DKK 185 million is included in trade receiv-
ables at December 31, 2023 (2022: DKK 174 million). GN Store Nord's
assessment of credit risk associated with individual receivables de-
pends primarily on aging, change in customer payment behavior, cur-
rent economic conditions etc. as described in significant accounting es-
timates.
No security has been pledged to GN Store Nord for trade receivables.
Accounting policies
Measurement of trade receivables
Trade receivables are measured at amortized cost less expected lifetime
credit losses. The expected loss rates are based on days past due and
whether a receivable concerns a GN Hearing or a GN Audio customer.
Current expectations and estimates of expected credit losses are
furthermore based on change in customer behavior and current economic
conditions. Expected credit losses are based on an individual assessment of
each receivable and at portfolio level.
1-60 days past 61-90 days past 91-120 days 121-180 days More than 181 DKK million Current due due past due past due days past due Total Gross carrying amount - Trade receivables 3.797 479 64 37 58 189 4.624 Loss allowance at December 31 -8 -1 -8 -3 -8 -154 -182 Trade receivables at December 31, 2023 3.789 478 56 34 50 35 4.442 Expected loss rate 0% 0% 13% 8% 14% 81% 4% Gross carrying amount - Trade receivables 3.340 476 57 34 62 236 4.205 Loss allowance at December 31 -13 -4 -1 -3 -16 -137 -174 Trade receivables at December 31, 2022 3.327 472 56 31 46 99 4.031 Expected loss rate 0% 1% 2% 9% 26% 58% 4%
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3.8 Provisions
Warranty Other DKK million provisions provisions Total Provisions at January 1 244 117 361 Additions 365 43 408 Consumed -256 -5 -261 Reversed -14 -1 -15 Foreign exchange adjustments -8 -1 -9 Provisions at December 31, 2023 331 153 484 Which is presented in the consolidated balance sheet as: Non-current liabilities 140 4 144 Current liabilities 191 149 340 Provisions at December 31, 2023 331 153 484
Warranty provisions concern products sold. The warranty provision
covers any defects in design, materials and workmanship for a period
of 1-4 years from delivery and completion. Other provisions primarily
consist of provisions for legal disputes, obligations regarding
onerous contracts and property leases.
In 2022 it was decided to reclassify the estimated refund liability recog-
nized for the goods that are expected to be returned from Provisions
to Other current liabilities as this is considered to be more in line with
the nature of the refund liabilities.
Accounting policies
Provisions
Warranty provisions are recognized as the underlying goods and services
are sold based on warranty costs incurred in previous years and expecta-
tions of future costs.
Provisions are recognized when, as a result of events before or at the bal-
ance sheet date, the Group has a legal or a constructive obligation and it is
probable that there may be an outflow of resources embodying economic
benefits to settle the obligation. On measurement of provisions, the costs
required to settle the liability are discounted if the effect is material to the
measurement of the liability.
A provision for onerous contracts is recognized when the expected benefits
to be derived by the Group from a contract are lower than the unavoidable
costs of meeting its obligations under the contract (onerous contracts). A
provision for onerous contracts is recognized e.g. when the Company has
entered a binding legal agreement for the purchase of components from
suppliers that exceeds the benefits from the expected future use of the
components and the Company can only sell the components at a loss.
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Introduction
Insight into GN Store Nord's capital structure and financial items as
well as financial risks.
4.1 Outstanding shares and treasury shares 106
4.2 Financial risks 107
4.3 Financial instruments 111
4.4 Liabilities from financing activities 116
4.5 Financial income and expenses 117
Section 4 - Capital structure
and financing items
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Annual Report 2023 Financial Statements – Consolidated
Content
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Content
4.1 Outstanding shares and treasury shares
All shares are fully issued and paid up. The nominal value of each share
is DKK 4 and no shares carry any special rights.
The treasury shares had a market value of DKK 911 million at Decem-
ber 31, 2023 (2022: DKK 1,473 million). An accelerated bookbuild of a
directed issue and private placing of 17 million new shares and 3.6 mil-
lion existing treasury shares was executed on May 24, 2023, which gen-
erated DKK 2.6 billion net of costs.
Treasury shares have been acquired under the share buyback program
in order to reduce the share capital, hedge the option- and warrant-
based long-term incentive programs as well as the obligation under the
convertible bond issued in 2019.
Weighted average number of shares Shares, thousands 2023 2022 Weighted average number of outstanding shares 138,883 127,823 Dilutive effect of share-based payment with positive 108 303 intrinsic value – average for the period Diluted weighted average number of shares 138,991 128,126
Result used for calculating EPS
DKK million 2023 2022 Profit (loss) for the year attributable to shareholders in GN Store Nord A/S used for the calculation of earn-ings per share 228 511
Cash distributions DKK million 2023 2022 Dividend paid related to prior years -214 Share repurchase during the year - -Total -214 Proposed dividend for the year -
DKK per share
Dividend paid related to prior years
Proposed dividend for the year
Nominal value Nominal value Nominal value Treasury shares Outstanding Total number of of outstanding of treasury of total shares as a percentage Thousands shares Treasury shares shares shares (DKK) shares (DKK) (DKK) of share capital Number/value of shares at January 1, 2023 127,973 9,220 137,193 511,892 36,882 548,774 6.7% Purchase of ownership interest in subsidiaries 320 - 1,280-1,280 - Share capital increase 17,320 -3,600 13,720 69,278-14,400 54,878 Number/value of shares at December 31, 2023 145,613 5,300 150,913 582,450 21,202 603,652 3.5%
- 1.55
- -
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Content
4.1 Outstanding shares and treasury shares
(Continued)
4.2 Financial risks
GN Store Nord is exposed to several financial risks arising from its op-
erating, investing and financing activities, comprising currency risk, in-
terest rate risk, liquidity risk and credit risk. Financial risks are man-
aged centrally by Group Treasury, except for commercial credit risk
which is managed decentralized by the Group’s operating businesses.
The Group’s Treasury Policy has been reviewed by the Audit Commit-
tee and approved by the Board of Directors.
Cash flow, liquid funds and debt are coordinated centrally to ensure
the solvency and liquidity of the Group. Material financial risks are
identified, managed and reported adequately. Financial transactions
are entered into only to mitigate risks from business activities or
financing of the Group.
The areas exposed to financial risks are mainly cash and cash equiva-
lents, loans and other financial indebtedness. GN’s objectives, policies
and process for measuring and managing the risk exposure to these
items are summarized in the table and further explained in the notes
below.
Accounting policies
Earnings per Share and Diluted Earnings per Share
Earnings per share (EPS) is calculated by dividing the profit for the year after
tax by the weighted average number of shares outstanding in the year.
Diluted earnings per share is calculated by increasing the weighted average
number of shares outstanding
by the number of additional ordinary shares
that would be outstanding if potentially dilutive shares were issued. The
dilutive effect of outstanding share based payment is calculated using the
Treasury Stock method.
Equity
Dividends
The expected dividend payment for the year is disclosed as a separate item in
equity. Proposed dividends are recognized as a liability at the date they are
adopted by the Annual General Meeting (declaration date).
Hedging reserve
The hedging reserve includes the accumulated net change in the fair value of
hedging transactions qualifying for hedge accounting.
Treasury Shares
Treasury shares are recognized at cost. Gains and losses on disposal of own
shares are calculated as the difference between the purchase price measured
in accordance with the FIFO
-
principle and the selling price. Gains or losses are
recognized directly in
retained earnings. Dividends received from treasury
shares are recognized directly in retained earnings. Capital reductions from
the cancellation of treasury shares are deducted from the share capital at an
amount corresponding to the nominal value of the
shares.
Foreign exchange adjustments
The translation reserve in the consolidated financial statements comprises
foreign exchange differences arising on translation of financial statements of
foreign subsidiaries from their functional currencies into the presentation
currency used by GN Store
Nord (DKK) and foreign exchange adjustments of
balances considered to be part of the total net investment in foreign entities.
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Content
4.2 Financial risks (Continued)
Financial risk Exposure Risk Management Policy Mitigating actions Based on the current revenue and cost composition, the anticipated pri-All hedging is conducted at Group level. GN has hedged a substantial part of the expected net EBITA in foreign Foreign currency risk mary foreign exchange exposures for the Group in 2023 (excluding currencies to secure the EBITA contribution of the material trading cur-EUR) mainly arise from USD and GBP, whereas other currencies on a A minimum of 75% and not more than 100% of the Net currency expo-rencies for the next 12 months across both GN Hearing and GN Audio. stand-alone basis would not have a material impact. sure in each operating business to maintain this hedging level at any GN is also monitoring the combined impact of minor trading currencies point in time. and hedges those on a case-by-case basis. EUR denominated financing carries FX revaluation risk. EUR denominated financing is hedged, through EUR denominated as-sets or through foreign exchange derivatives. GN’s non-current debt have fixed and floating interest rates as of De-At least 50% of all Interest-Bearing Debt should be fixed in 50% of Interest-Bearing Debt carried fixed interest rates as of Decem-Interest rate risk cember 31, 2023. interest, either through fixed rate agreements or through derivative in-ber 31, 2023. GN will consider entering into interest rate derivatives to struments. swap part of the floating debt into fixed-rate, if needed to mitigate the cash-flow risk from rising interest rates. GN’s net interest-bearing debt de creased during 2023 to DKK 10,567 GN’s cash flow, liquid funds and debt are coordinated centrally to en-To mitigate potential liquidity or refinancing risks, GN has increased its Liquidity risk, million (202 2: DKK 14,561 million). As a result, the net interest-bearing sure the solvency and liquidity of the Group. current Revolving Credit Facility to EUR 520 million from EUR 350 mil-funding, and capital debt to EBITDA ratio ended at 6.0x (2022: 7.1x) driven by the execution lion with maturity in 2027. On December 31, 2023 the Revolving Credit structure of the group’s capital plan and strong cash flow generation. GN has a long-term capital structure target of a net interest-bearing Facilities were unutilized. debt to EBITDA ratio between one and two. GN’s loans and bonds are primarily long-term with maturities extended To mitigate potential short to mid-term refinancing risk, GN has re-until 2036 with mostly fixed interest rates. placed the existing EUR 520 million term loan maturing in 2025 with a new EUR 800 million term loan facility maturing in Q3 2026. Further in 2023, GN has executed a sale and leaseback of the com-pany’s headquarter, which generated net proceeds of around DKK 500 million on December 15, 2023. GN’s exposure to credit risk arises primarily from trade and other receiv-GN has established policies for credit risk management related to cus-GN has decentralized the credit risk management relating to customer Financial credit risk ables. tomers including the use of credit rating agencies. including the use of credit rating agencies to the divisions (GN Hearing and GN Audio).
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4.2 Financial risks (Continued)
Foreign currency risk
GN Store Nord has exposure towards foreign currencies exchange rate
risk, mainly arising from the fluctuations of USD, in connection with
commercial transactions. The general policy is to minimize GN Store
Nord's currency exposure through natural matching of in- and out-
flows to mitigate the impact of exchange rate fluctuations on earnings
and cash flow, thereby increasing the predictability of the financial re-
sults. Additionally, the Group uses approved hedging instruments, in-
cluding currency derivatives such as FX Spot, FX Forward, FX Swaps
and FX Option contracts, to hedge the Group’s EBITA and Free Cash
Flow from adverse currency movements by determining the aggregate
of the expected net cash flow 12 months forward and monetary bal-
ance sheet items.
Sensitivity analysis for foreign currency risk
The below sensitivity analysis illustrates the potential change in GN
Store Nord’s profit or loss and equity in response to a weakening /
strengthening of the currencies of which GN Store Nord has significant
exposure to at the balance sheet date. This analysis assumes that all
other variables, in particular interest rates, remain constant. At year-
end an increase of 10% in the USD exchange rate and 5% in the GBP
exchange rate would affect the Income statement and Equity as out-
lined in the table below:
USD GBP DKK million 2023 2022 2023 2022 Profit or loss before tax -43 -18 2 12 Other Comprehensive Income before tax 113 146 -26 -31 The exposure at year-end is not necessarily representative of the past
or future exposure of the Group.
The sensitivity analysis comprises cash and cash equivalents, current
receivables, trade payables, current and non-current loans, intercom-
pany balances and derivative exchange rate instruments as of Decem-
ber 31. The effects of a change in foreign exchange rates related to
these items would be included in the Income statement. A change in
the value of derivative exchange rate instruments used for hedging
would be included in Other comprehensive income if hedge accounting
is applied.
Interest rate risk
GN Store Nord’s non-current debt have fixed and floating interest
rates: listed instruments of EUR 50 million private placement with
fixed coupon of 1.97% per annum and GBP 40 million private place-
ment with fixed coupon of 3.2% per annum as well as bilateral R&D
loans with fixed interest rates, EUR 120 million Term loan drawdown
with variable interest rates.
GN Store Nord’s short-term debt consists of EUR 330 million Bond-
with-Warrant-Units 0% and notes issued under the EMTN program in-
cluding EUR 600 million notes with fixed coupon of 0.875% per annum,
An increase of variable interest rates of 1 percentage point would re-
sult in a net increase in the annual interest expenses of DKK 8.9 million
(2022: DKK 0 million).
Specification of net interest-bearing debt
DKK million
2023
2022
Loans to dispensers 770 702 Cash and cash equivalents 2,162 990 Bank loans and issued bonds, non-current liabilities -9,957 -9,866 Bank loans and issued bonds, current liabilities -3,243 -6,016 Lease liabilities -299 -371 Total -10,567 -14,561
Included in the DKK 2,162 million cash and cash equivalents on the
Consolidated statement of financial position is DKK 528 million which
is restricted to be used for coming debt repayments and other related
costs in accordance with the capital plan. This amount includes the
proceeds received from the sale of BelAudição.
Funding, liquidity and capital structure
The Group’s capital structure includes interest bearing long-term debt
with maturities between 2026 and 2036, including bank loans, convert-
ible bonds, notes under the Euro Medium Term Note (EMTN) program,
and two drawing rights attached to a EUR 520 million committed re-
volving credit facility and a EUR 800 million committed term loan facil-
ity. EUR 520 million committed revolving credit facility was unutilized
on December 31, 2023, and EUR 120 million out of the EUR 800 million
committed term loan facility was utilized as of December 31, 2023.
(2022: EUR 350 million committed revolving credit facility and a EUR
520 million committed term loan facility, unutilized).
In addition, the Group has EUR 442 million short-term, uncommitted
Money Market lines and Overdraft facilities from its main relationship
banks to diversify its borrowing instruments and manage its net work-
ing capital movement. Money Market lines and Overdraft facilities was
utilized EUR 214 million on December 31, 2023 (2022: utilized at EUR
251 million)..
Moreover, GN has a short-term, uncommitted Euro Commercial Paper
program of up to EUR 250 million. The Euro Commercial Paper pro-
gram was utilized at EUR 32 million on December 31, 2023 (2022: uti-
lized at EUR 35 million).
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Content
4.2 Financial risks (Continued)
Interest-bearing debt additions during the year
On May 24, GN announced a new capital plan to prepare for repay-
ment of approximately DKK 7 billion debt that matures in 2024 and ef-
fectively pushes all material debt maturities to 2026. Execution of the
four pillars of the plan continues to progress well. The pillars are:
• Equity: An accelerated bookbuild of a directed issue and private
placing of 17 million new shares and existing treasury shares exe-
cuted on May 24, 2023, which generated DKK 2.6 billion net pro-
ceeds
• Debt refinancing: New DKK 6.0 billion (EUR 800 million) term loan
facility maturing in 2026 replaced existing DKK 3.9 billion (EUR 520
million) term loan. The new loan was signed and finalized on Sep-
tember 27, 2023
• Disposals: DKK 1.0 – 2.0 billion to be generated by disposals of se-
lected assets. Disposal of BelAudição announced on June 28 gener-
ated DKK ~500 million in Q3 2023. Moreover, GN has executed a
sale and leaseback of the company’s headquarter, which generated
net proceeds of DKK ~500 million on December 15, 2023
• Operational measures: Cash at hand and positive free cash flow
excl. M&A for 2023 and 2024 at Group level; DKK 1.1 billion cash
flow excl. M&A generated in 2023.
In addition, GN has executed an increase of its current undrawn revolv-
ing credit facility. The new facility has been increased to EUR 520 mil-
lion from EUR 350 million with maturity in 2027. The credit facility
agreement was signed and finalized on September 27, 2023. GN’s over-
all financial target is to deliver a competitive shareholder return
through a combination of dividend payments and share price apprecia-
tion.
Financial credit risk
Credit risk is defined as an unexpected loss in cash and earnings if the
customer is unable to pay its obligation in due time. GN may incur
losses if the credit quality of its customers deteriorates or if they de-
fault on their payment obligations to GN. GN’s exposure to credit risk
arises primarily from trade and other receivables. Such credit risk is
managed decentralized through the divisions (GN Hearing and GN Au-
dio). Assessment of credit risks related to customers is further de-
scribed in note 3.7 Trade receivables and note 3.5 Other non-current
assets.
Surplus cash positions in GN Store Nord’s subsidiaries are centralized
through Group Treasury if feasible, and cash is mainly held in current
accounts or as short-term money market deposits. Cash positions are
primarily held with financial institutions through which GN Store Nord
conducts its day-to-day banking transactions and which are highly
rated with Moody’s and Standard & Poor’s.
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Content
4.3 Financial instruments
Accounting policies
Financial Liabilities
Amounts owed to credit institutions and banks as well as the issued EMTN
bonds are recognized at the date of borrowing at fair value of the proceeds
received less transaction costs paid. In subsequent periods, the financial
liabilities are measured at amortized cost, corresponding to the capitalized
value using the effective interest rate. Accordingly, the difference between
the proceeds and the nominal value is recognized in the income statement
over the term of the loan.
Issued Bond-With-Warrant units are initially recognized at fair value less
related transaction costs. The fair value of the bonds is estimated by calcu-
lating the present value of all contractual future cash flows using an inter-
est rate for a bond with similar credit risk and duration as the issued bonds,
but without the attached warrants. The difference between the fair value
and the proceeds is considered to be the value of the warrants and is rec-
ognized in Equity. The equity component is not re-measured subsequently.
After initial recognition the bonds are measured at amortized cost using
the effective interest method. By applying the effective interest method a
constant interest rate is used to increase the carrying amount of the bonds
and the difference between the carrying amount and the principal amount
is in this way recognized as an interest expense in Financial expenses over
the remaining term to maturity. In case the bonds are redeemed before
maturity, the difference between the carrying amount at amortized cost
and the principal amount will be recognized as a loss in Financial expenses.
Other liabilities, comprising trade payables, amounts owed to associates as
well as other payables, are measured at amortized cost.
Categories of financial assets and liabilities
The financial assets and liabilities presented in the balance sheet can be grouped in the following categories:
DKK million 2023 2022 Financial assets Trade receivables 4,442 4,031 Other receivables 744 672 Other non-current assets 1,233 1,141 Financial assets at amortized cost 6,419 5,844 Derivative financial instruments included in Other receivables 117 34 RAP, SIP, DCP and Ownership interests, etc. included in Other non-current assets 494 471 Financial assets at fair value through profit or loss 611 505 Derivative financial instruments included in Other receivables 11 16 Financial assets at fair value through Other comprehensive income 11 16 Financial liabilities Issued bonds (bond-with-warrant units), non-current 3,189 2,401 Issued EMTN bonds, non-current 335 5,147 Bank loans, non-current 3 2,318 Bank loans and issued bonds, current 9,674 6,016 Lease liabilities 299 371 Other non-current liabilities 4 4 Trade payables 1,719 1,554 Financial liabilities at amortized cost 15,22 3 17,811 Derivative financial instruments included in Other liabilities 65 17 RAP, SIP and DCP included in Other non-current liabilities 265 256 Contingent consideration included in Other liabilities 90 131 Financial liabilities at fair value through profit or loss 420 404 Derivative financial instruments included in Other liabilities 26 105 Financial liabilities at fair value through Other comprehensive income 26 105
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Content
4.3 Financial instruments (Continued)
Contractual maturity analysis for financial liabilities
Between one and More than three DKK million Less than one year three years years Total 2023 Issued bonds 7,053 37 892 7,982 Bank loans 2,048 452 2,529 5,029 Lease liabilities 112 140 69 321 Other liabilities - 54 215 269 Trade payables 1,719 - - 1,719 Contingent consideration 35 55 - 90 Total non-derivative financial liabilities 10,967 738 3,705 15,410 Derivative financial liabilities 91 - - 91 Total 11,058 738 3,705 15,50 1 2022 Issued bonds 1,716 6,987 899 9,602 Bank loans 4,428 454 2,063 6,945 Lease liabilities 130 164 94 388 Other liabilities - 56 204 260 Trade payables 1,554 - - 1,554 Contingent consideration 39 41 51 131 Total non-derivative financial liabilities 7,867 7,702 3,311 18,880 Derivative financial liabilities 122 - - 122 Total 7,989 7,702 3,311 19,002 The maturity analysis is based on non-discounted cash flows.
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4.3 Financial instruments (Continued)
Fair value adjustments of cash flow hedges DKK million 2023 2022 Fair value adjustment for the year recognized in Other comprehen-sive income -27 -52 Reclassified from equity to revenue during the year -58 -1 Reclassified from equity to production costs during the year 136 -20 Adjustment of cash flow hedges in Other comprehensive income 51 -73 Fair value adjustment of non-designated hedges recognized in Other operating income and costs, net - -14 Fair value adjustment of non-designated hedges recognized in fi-nancial items 96 -356 All exchange rate instruments mature within 12 months from the bal-
ance sheet date.
The gains and losses on cash flow hedges recognized in Other compre-
hensive income as of December 31, 2023 will be recognized in the In-
come statement in the period during which the hedged forecasted
transaction affects the Income statement.
Accounting policies
Derivative Financial Instruments
Derivative financial instruments are initially and subsequently recognized
in the balance sheet at fair value. Positive and negative fair values of
derivative financial instruments are recognized as other receivables and
payables, respectively. Fair values of derivative financial instruments are
computed on the basis of market data and generally accepted valuation
methods.
Accounting policies
Derivative Financial Instruments (continued)
Changes in the fair value of derivative financial instruments designated as
and qualifying for recognition as a hedge of the fair value of a recognized
asset or liability are recognized in the income statement together with
changes in the value of the hedged asset or liability as far as the hedged
portion is concerned. Changes in the portion of the fair value of derivative
financial instruments designated as and qualifying as a cash flow hedge
that is an effective hedge of changes in the value of the hedged item are
recognized in other comprehensive income. If the hedged transaction re-
sults in gains or losses, amounts previously recognized in other compre-
hensive income are transferred from equity to the same item as the
hedged item.
When a hedging instrument expires, or is terminated, or when a hedge no
longer meets the criteria for hedge accounting, any gains or losses previ-
ously recognized in Other comprehensive income remains in Equity until
the forecast transaction occurs. When the forecast transaction is no longer
expected to occur, the cumulative gain or loss that were reported in equity
are immediately reclassified to the income statement.
For derivative financial instruments, where hedge accounting is not applied
(economic hedges), changes in fair value are recognized in the Income
statement as either Other operating income and costs, net or Financial
items.
The effectiveness of hedges is assessed on the following criteria:
• An economic relationship exists between the hedged item and hedging
instrument:
• The effect of credit risk does not dominate the fair value changes;
and
• The hedge ratio applied for hedge accounting purposes should be
the same as the hedge ratio used for risk management purposes.
No material ineffectiveness amounts were recognized in the Statement of
Financial Performance during the year.
Derivative financial instruments
Exchange rate instruments
2023 2022 Average rate Contract Fair value, Fair value, Average rate Contract Fair value, Fair value, DKK million (DKK) amount, net* assets liabilities (DKK) amount, net* assets liabilities USD / DKK 686 -1,445 56 75 729 -1,531 - 86 USD / EUR 689 2,860 65 - 695 2,581 8 - GBP** 854 169 - 6 848 114 8 14 INR / DKK 8 255 4 1 9 349 18 - Other currency pairs -6,974 2 9 -9,367 16 22 Total 127 91 50 122 * Positive contract amounts indicate sale of currencies vs. DKK or EUR ** Includes exchange rate instruments vs. DKK and EUR
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Content
4.3 Financial instruments (Continued)
2023 2022 Observable Unobservable Observable Unobservable Quoted prices input input Quoted prices input input DKK million (level 1) (level 2) (level 3) Total (level 1) (level 2) (level 3) Total Financial assets Derivative financial instruments included in Other receivables - 117 - 117 - 34 - 34 RAP, SIP, DCP included in Other non-current assets - 349 - 349 - 325 - 325 Ownership interests, etc. included in Other non-current assets - - 145 145 - - 146 146 Financial assets at fair value through profit or loss - 466 145 611 - 359 146 505 Derivative financial instruments included in Other receivables - 11 - 11 - 16 - 16 Financial assets at fair value through Other comprehensive income - 11 - 11 - 16 - 16 Financial liabilities Derivative financial instruments included in Other liabilities - 65 - 65 - 17 - 17 RAP, SIP and DCP included in Other non-current liabilities - 265 - 265 - 256 - 256 Contingent consideration included in Other liabilities - - 90 90 - - 131 131 Financial liabilities at fair value through profit or loss - 330 90 420 - 273 131 404 Derivative financial instruments included in Other liabilities - 26 - 26 - 105 - 105 Financial liabilities at fair value through Other comprehensive income - 26 - 26 - 105 - 105
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Content
4.3 Financial instruments (Continued)
In addition to the above, Other non-current liabilities include a liability
of DKK 322 million (2022: DKK 387 million) related to put options is-
sued on shares held by non-controlling shareholders which is measured
at fair value (fair value hierarchy level 3). Adjustments to the fair value
are accounted for as other equity transactions.
DKK million 2023 2022 Fair value net gains (losses) recognized in the income statement: Net fair value gains (losses) on RAP, SIP and DCP 13 -21 Net fair value gains (losses) on ownership interests and derivatives re. ownership interests 1 141 Net fair value gains (losses) on contingent consideration 7 -15
Exchange rate instruments and interests rate swaps
The fair value of the exchange rate instruments and interest rate
swaps are determined using quoted forward exchange rates and for-
ward interest rates, respectively at the balance sheet date and can be
categorized as level 2 (observable inputs) in the fair value hierarchy.
Ownership interests
The fair value of the ownership interests is based on a market approach
model. The key input is market observations of sales prices of compa-
rable retail entities, combined with internal GN data such as number of
sold hearing aids and the financial statements in which GN holds an in-
terest. In the model, the ownership interests are divided into four
groups of revenue multiple, according to the relative size and profita-
bility of the dispensers. Since most of the data is based on non-observ-
able data, the model is categorized as level 3 in the fair value hierarchy.
The model is updated on a quarterly basis and any changes are re-
flected in the Income statement or in Other comprehensive income as
applicable. The fair value models are sensitive to the dispenser’s finan-
cial performance for the last 24 months rolling on a quarterly basis.
Derivative financial instruments related to ownership interests
Derivative financial instruments related to ownership interests in dis-
pensers of GN Hearing products, are recognized in the balance sheet at
fair value. The fair value model is based on a market approach model,
using market observations of sales prices of comparable retail entities.
The key inputs used are the number of hearing aid units sold by cus-
tomer, average selling prices, and the estimated probability that the in-
struments will be exercised. The fair value model is categorized as level
3 in the fair value hierarchy, and is updated on a quarterly basis, and
any material changes are reflected in the income statement. The fair
value models are sensitive to the customers financial performance the
last twelve months of any quarter and the probability of the instru-
ments being exercised.
RAP, SIP and DCP programs
RAP (Retirement Advantage Plan) and SIP (Savings and Investment
Plan) are programs in which customers earn funds based on purchases
made. DCP (Deferred Compensation Plan) is a program in which Man-
agement in certain foreign subsidiaries may choose to defer compensa-
tion. The asset value is based on the fair value of the mutual fund in-
vestments, and the liability is based on the value generated by partici-
pant contributions, participant distributions, forfeitures, and invest-
ment earnings or losses. Both asset and liabilities are categorized as
level 2 in the fair value hierarchy. Each quarter GN receive a report re-
garding the fair value of the assets from a third-party contractor, and
will update the financial statements according to this report.
Contingent consideration
Contingent consideration, resulting from business combinations or di-
vestments, is valued at fair value at the acquisition or divestment date
as part of the transaction. The fair value is based on discounted cash
flows and contractual terms of the contingent considerations and on
non-observable inputs, such as the financial performance of the ac-
quired enterprises. The key assumptions take into consideration the
probability of meeting each performance target and the discount fac-
tor. Contingent considerations are categorized as level 3 (unobservable
inputs) in the fair value hierarchy. The models are updated on a quar-
terly basis and any changes are reflected in the income statement. The
fair value models are sensitive to the financial performance of the ac-
quired enterprises, the probabilities of meeting the agreed objectives
and the discount factor.
Fair value disclosures re. financial instruments at amortized cost
Based on observable inputs (fair value hierarchy level 2) the fair value
of issued bonds (zero coupon) amounted to DKK 2,403 million at De-
cember 31, 2023 (2022: DKK 2,222 million), and the fair value of EMTN
bonds amounted to DKK 4,726 million (2022: DKK 5,918 million). For
other financial assets and liabilities, the fair value is approximately
equal to the carrying amount.
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Content
4.4 Liabilities from financing activities
Other non-Bank loans Bank loans, Issued bonds, current and issued DKK million non-current non-current liabilities Lease liabilities bonds, current Total Liabilities at January 1 2,318 7,548 867 371 6,016 17,120 Cash flows -1,834 2,290 -98 -104 -3,273 -3,019 Foreign exchange adjustments -2 29 28 -7 - 48 New leases - - - 38 - 38 Non-cash interest expenses - 30 - - - 30 Additions on company acquisitions - - - - - - Bonds reclassified to current - -6,931 - - 6,931 - Other non-cash adjustments 21 58 -20 - - 59 Liabilities at December 31, 2023 503 3,024 777 298 9,674 14,276 Liabilities at January 1 372 9,141 727 438 1,615 12,293 Cash flows 1,935 - 53 -153 1,725 3,560 Foreign exchange adjustments -1 -19 19 5 2 6 New leases - - - 25 - 25 Non-cash interest expenses - 60 - - - 60 Additions on company acquisitions 6 - - 56 1,040 1,102 Bonds reclassified to current - -1,634 - - 1,634 - Other non-cash adjustments 6 - 68 - - 74 Liabilities at December 31, 2022 2,318 7,548 867 371 6,016 17,120
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4.5 Financial income and expenses
DKK million 2023 2022 Financial income Gains and fair value adjustments on ownership interests 1 141 Interest income* 63 7 Financial income, other 4 15 Fair value adjustments of derivative financial instruments 96 - Foreign exchange gain - 89 Reversal of impairment on loan dispensers - 4 Total 164 256 Financial expenses Interest expenses* -326 -186 Interest rate swap - -194 Financial expenses, other -166 -119 Fair value adjustments of derivative financial - -162 instruments Foreign exchange loss -100 - Impairments on loans to dispensers -34 - Total -626 -661 * Interest income and expenses from financial assets and liabilities at amortized cost
Accounting policies
Financial income and expenses
Financial income and expenses comprise interest income and expense,
costs of permanent loan facilities, gains and losses on securities, receiva-
bles, payables and transactions denominated in foreign currencies, credit
card fees, amortization and impairment of financial assets and liabilities,
etc. Also included are realized and unrealized gains and losses on derivative
financial instruments that are not designated as hedges.
Borrowing costs that are directly attributable to the construction or
production of a qualifying asset form part of the cost of that asset. Other
borrowing costs are recognized as an expense. A qualifying asset is an asset
that necessarily takes a substantial period of time to get ready for its
intended use.
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Introduction
Statutory notes and other disclosures.
5.1 Acquisition and divestment of companies and operations 119
5.2 Remuneration of the Board of Directors and Executive
Management 122
5.3 Share-based incentive plans 124
5.4 Pension obligations 127
5.5 Contingent liabilities 128
5.6 Investments in associates 129
5.7 Other non-cash adjustments 129
5.8 Fees to statutory auditors 129
5.9 Related parties 129
5.10 Events after the reporting period 129
Section 5 -
Other disclosures
GN Store Nord
Annual Report 2023 Financial Statements – Consolidated
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Content
5.1 Acquisition and divestment of companies and operations
Acquisitions
During 2023, there were no material business acquisitions nor further adjustments made relating to acquisi-
tions made in 2022.
On January 12, 2022, GN Audio acquired 100% of the Danish based company SteelSeries Group A/S, a global
pioneer in premium software-enabled gaming gear. SteelSeries, with its attractive growth profile and margin
structure, presents an attractive new growth opportunity for GN. The acquisition of SteelSeries will bring
complementary engineering competencies, commercial capabilities, differentiated brands, a large customer
base and an innovative high-growth product offering, adding further technical expertise and IP to GN.
SteelSeries will benefit from GN‘s commercial and operational excellence, and financial strength, allowing
SteelSeries to continue its strong growth trajectory and take share in the fast-growing market for premium
software-enabled gaming gear. Based on GN’s successful track-record of integrating acquired assets, it is
anticipated that the combination will produce significant scaling opportunities and revenue synergies when
combining SteelSeries with GN’s extensive global distribution footprint. Goodwill comprises the expected
synergies as well as the value of SteelSeries highly skilled workforce.
On April 21, 2022, GN Hearing acquired 56% of BelAudição Lda, as a business combination achieved in
stages, after which GN owns 100% of the company. The acquisition, which is an ownership in transition, will
strengthen GN Hearing’s sales and distribution. Goodwill comprises expected synergies as well as the value
of the highly skilled workforce of BelAudição. The acquisition resulted in a fair value gain of DKK 137 million
that is included in financial income (note 4.5).
The goodwill of DKK 5,580 million relating to SteelSeries is allocated to the cash-generating unit GN Audio,
and the goodwill of DKK 237 million relating to BelAudição is allocated to the cash-generating unit
GN Hearing. The goodwill is not tax deductible.
Fair value at acquisition date DKK million SteelSeries BelAudição Other 2022 Identifiable assets acquired, liabilities as-sumed and consideration transferred Patents, trademarks and other intangibles 891 - - 891 Development projects 887 - 16 903 Customer relationships 749 203 6 958 Other intangible assets - - - - Property plant and equipment 77 53 - 130 Investments in associates 13 - - 13 Deferred tax asset - - - - Other receivables 193 4 - 197 Inventory 577 23 - 600 Trade receivables 329 11 - 340 Tax receivables 29 - - 29 Cash 238 31 - 269 Bank debts and non-current liabilities -1,059 -33 - -1,092 Deferred tax liability -447 -46 -2 -495 Trade payables -297 -8 - -305 Taxes payables -123 - - -123 Other current liabilities -397 -34 -4 -435 Current liabilities - - -2 -2 Fair value of identified net assets 1,660 204 14 1,878 Goodwill 5,580 237 69 5,886 Consideration transferred 7,240 441 83 7,764 Fair value of existing ownership interest - -194 - -194 Payable consideration - - -2 -2 Contingent consideration - -62 -62 Acquired cash and cash equivalents -238 -31 - -269 Cash consideration paid 7,002 216 19 7,237
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5.1 Acquisition and divestment of companies and operations
(Continued)
DKK million SteelSeries BelAudição Other 2022 The share of revenue and profit (loss) for the year from the acquisition date can be specified as follows: Revenue 2,317 154 11 2,482 Profit (loss) for the year -203 1 1 -201 Estimated impact of acquired operations if they had been owned throughout the year: Revenue 2,352 230 11 2,593 Profit (loss) for the year -208 1 1 -206
Divestments etc.
On September 14, 2023 , GN hearing disposed BelAudição Lda.
The transaction demonstrates GN Hearing’s commitment to its successful strategy of not owning retail and
instead focusing on being a key supplier to strong independent hearing aid dispensers. GN finalized the ac-
quisition of BelAudição – a long-time GN Hearing customer – in 2022 to facilitate a generational transition.
GN Hearing has, therefore, carefully considered potential buyers to back the next phase of BelAudição’s im-
pressive growth journey while securing that GN Hearing remains a key supplier of hearing aids to the busi-
ness.
DKK million 2023 2022 Non-current assets -461 -39 Current assets -101 -13 Non-current liabilities 67 - Current liabilities 41 - Disposed net assets -454 -52 Directly attributable cost -7 Fair value of assets received 37 66 Fair value of liabilities assumed - -14 Cash consideration received 485 Gain (loss) on divestment of operations 61 - Other adjustments - -9 Gain (loss) on divestment of operations etc. 61 -9
Moreover, in 2023, GN Hearing divested a minor hearing instrument distributor primarily in the US. In 2022,
GN Hearing divested 59 hearing instrument distributors in the US.
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Content
5.1 Acquisition and divestment of companies and operations
(Continued)
Accounting policies
Business Combinations
Enterprises acquired or formed during the year are recognized in the consoli-
dated financial statements from the date of acquisition or formation. The
ac-
quisition date is the date when the parent company effectively obtains con-
trol of the acquired enterprise. Enterprises dis
-posed of are recognized in the
consolidated income statement until the disposal date. The comparative fig-
ures are not restated for
acquisitions.
For acquisitions of new enterprises in which the parent company is able to ex-
ercise control over the acquired enterprise, the purchase method is used. The
acquired enterprises’ identifiable assets, liabilities and contingent liabilities
are measured at fai
r value at the acquisition date. Identifiable intangible as-
sets are recognized if they are separable or arise from a contractual right. De-
ferred tax on revaluations is recognized.
Any excess of the cost over the fair value of the identifiable assets, liabilities
and contingent liabilities acquired is recognized as goodwill under intangible
assets. Goodwill is not amortized but is tested at least annually for impair-
ment. The first im
pairment test is performed within the end of the acquisition
year. Upon acquisition, goodwill is allocated to the cash
-generating units,
which subsequently form the basis for the impairment test. Goodwill and fair
value adjustments in connection with the a
cquisition of a foreign entity with
another functional currency than the presentation currency used by GN Store
Nord are treated as assets and liabilities belonging to the foreign entity and
translated into the foreign entity’s functional currency at the e
xchange rate
at the transaction date.
The cost of a business combination comprises the fair value of the considera-
tion agreed upon. When a business combination agreement provides for an
adjustment to the cost of the combination contingent on future events, the
amount of that adjustment is incl
uded in the cost of the combination if the
adjustment is probable and can be measured in a reliable manner. Subsequent
changes to contingent considerations are recognized in the income state-
ment. If uncertainties regarding measurement of identifiable asset
s, liabilities
and contingent liabilities exist at the acquisition date, initial recognition will
take place on the basis of preliminary fair values. If identifiable assets, liabili-
ties and contingent liabilities are subsequently determined to have differe
nt
fair value at the acquisition date than first assumed, goodwill is adjusted up
until twelve months after the acquisition. The effect of the adjustments is rec-
ognized in the opening balance of equity and the comparative figures are re-
stated accordingly.
When acquiring a controlling interest in steps, GN Store Nord assesses the fair
value of the acquired net assets at the time control is obtained. At such time,
interests acquired previously are also adjusted to fair value. The difference be-
tween the fair v
alue and the carrying amount is recognized in the income
statement.
Acquisition of additional equity interest after a business combination is not
accounted for using the acquisition method, but rather as equity transactions.
Disposals of equity interest while retaining control are also accounted for as
equity transactions.
Transactions resulting in a loss of control result in a gain
or loss being recognized in the income statement.
When acquiring less than 100% of the shares in a company, GN Store Nord
recognizes the goodwill on a transaction
-by-transaction basis or as a propor-
tion of goodwill in accordance with GN Store Nord’s ownership interest.
In business combinations where put options have been issued regarding
shares held by non
-controlling interests the non-controlling interests are rec-
ognized initially. As long as the put options remain unexercised the non
-con-
trolling interests are updated at the end of each reporting period, including its
share of allocations of profit or loss. The non
-controlling interests are thereaf-
ter derecognized by recognizing a financial liability for the put options and the
difference is included as an equity transac
tion. If the put options are exer-
cised, the same treatment is applied up to the date of exercise. The amount
recognized as the financial liability at that date, is extinguished by the pay-
ment of the exercise price. If the put option expires unexercised, th
e position
is unwound so the non
-controlling interest is recognized at the amount it
would have been, had the put options never been issued. The financial liability
is derecognized in equity
.
Significant accounting estimates and judgments
Purchase price allocation in business combinations
The application of the acquisition method for business combinations involves
the use of
significant estimates as the identifiable net assets of the acquiree
are recognized at
their fair value for which observable market prices are
typically not available.
This is particularly relevant for intangible assets which
require use of
valuation techniques. Accordingly, management makes
estimates of the fair value of acquired assets, liabilities and contingent
liabilities. Depending on the nature of the item, the determined
fair value of
an item may be associated with uncertainty and possibly adjusted
subsequently.
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Content
5.2 Remuneration of the Board of Directors and
Executive Management
Share-based incentive plans
The Group's long-term equity-settled incentive program is speci-
fied and described in note 5.3 share-based incentive plans.
Executive Management and Board of Directors Remuneration
The total remuneration of the Executive Management is based on
the “General Guidelines for Incentive Pay to Management”, as
adopted at GN´s Annual General Meeting.
The remuneration of the Executive Management is based on a
fixed base salary and participation in GN Store Nord’s option- and
warrant-based long-term incentive programs. Furthermore, the
remuneration includes a yearly bonus plan (Short-term incentives)
with a target bonus of 50% of the base salary with a potential to
underperform or outperform the target leading to an effective po-
tential bonus range between 0 - 100% of the base salary. The cur-
rent Executive Management´s bonus is based on three parameters
in light of the Group's focus areas:
• Peter Karlstromer’s bonus is subject to the performance of
GN Audio’s EBITA, revenue, cash flow, and individual performance
targets from January to September 2023. From October, his bonus
is subject to GN Store Nord’s EBITA, revenue, cash flow, and indi-
vidual performance targets.
• Søren Jelert’s bonus is subject to the performance of GN
Store Nord’s EBITA, revenue, cash flow, and individual perfor-
mance targets.
Remuneration to Executive Management and Board of Directors can be specified as follows:
2023 2022 Short-Share-Short-Share-Fixed term in-based Fixed term in-based DKK million pay* centives incentives Total pay* centives incentives Total Peter Karlstromer, CEO of GN Store Nord from January 2, 2023 8.3 8.8 1.8 18.9 - - - - Søren Jelert, CFO of GN Store Nord from June 1, 2023 2.8 2.3 1.3 6.4 - - - - Gitte Pugholm Aabo, CEO, GN Hearing until October 1, 2023 8.1 6.9 -3.1 11.9 7.8 6.2 3.9 17.9 René Svendsen-Tune, CEO, GN Store Nord & GN Audio until January 2, 2023 9.4 4.6 -8.8 5.2 9.1 3.6 4.3 17.0 Peter la Cour Gormsen, CFO, GN Store Nord & GN Audio until June 1, 2023 4.1 2.1 -3.4 2.8 4.0 1.1 2.2 7.3 Total Executive Management remuneration 32.7 24.7 -12.2 45.2 20.9 10.9 10.4 42.2 Separation agreements expensed in 2023 re. Executive Management - - - 9.5 - - - 37.2 Board of Directors remuneration 9.1 - - 9.1 10.0 - - 10.0 Total remuneration to Executive Management and Board of Directors 41.8 24.7 -12.2 63.8 30.9 10.9 10.4 89.4 * Fixed pay include Base salary and Other benefits. Other benefits include car allowances, company paid telephone and interne t cost. For the Board of Directors Other benefits include travel allowance and social security costs
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5.2 Remuneration of the Board of Directors
and Executive Management (Continued)
The Group does not make pension contributions for members of the Ex-
ecutive Management. Executive Management has usual severance
agreements and change-of-control agreements.
Members of the Board of Directors receive a fixed remuneration as
approved by the shareholders at the Annual General Meeting on March
13, 2024. The base fee for the Board of Directors did not change from
2022 to 2023. The fixed remuneration is based on GN Store Nord´s cor-
porate governance structure in which an audit committee, a strategy
committee, a remuneration committee and a nomination committee
have been established. Further, the appointed board members of GN
Store Nord also serve on the Board of Directors of GN Hearing A/S and
GN Audio A/S.
The full-year remuneration of the Board of Directors is as follows
(DKK thousand):
GN Store Nord A/S GN Hearing A/S Chair 915 Chair 300 Deputy Chair 610 Deputy Chair 210 Other Board members 305 Other Board members 120 Remuneration Committee Chair 370 Remuneration Committee, other members 185 Audit Committee Chair 370 Audit Committee, other members 185 Strategy Committee Chair 370 GN Audio A/S Strategy Committee other members 185 Chair 300 Nomination Committee Chair 180 Deputy Chair 210 Nomination Committee other members 90 Other Board members 120
In addition to the remuneration, members of the Board of Directors who
are not Danish residents are entitled to a fixed travel allowance in con-
nection with participation in board meetings in Denmark. For European-
based board members the allowance amounts to EUR 3,000 (DKK
22,500) per meeting and for Non-European based board members the
allowance amounts to EUR 6,000 (DKK 45,000) per meeting.
DKK thousand 2023 2022 Board of Directors Jukka Pertola (Chair from Q2 2023, Deputy Chair from Q2 2020) 2,061 1,696 Per Wold-Olsen (Chair until Q1 2023) 540 2,183 Klaus Holse (Deputy Chair from Q2 2023) 1,118 - Hélène Barnekow 1,165 774 Ronica Wang (until Q4 2023) 869 730 Montserrat Pascual (from Q2 2020 until Q1 2023) 229 915 Anette Weber (from Q2 2020) 983 915 Leo Larsen* 444 305 Cathrin Inge Hansen (from Q2 2022)* 305 259 Claus Holmbeck-Madsen (from Q2 2022)* 305 229 Wolfgang Reim (until Q1 2022) - 275 Morten Andersen (until Q1 2022)* - 76 Marcus Stuhr Perathoner (until Q1 2022)* - 76 Total Board of Directors remuneration 8,019 8,433 * Employee elected members
DKK thousand 2023 2022 Fixed travel allowance & social security Per Wold-Olsen (until Q1 2023) 68 158 Hélène Barnekow 392 434 Ronica Wang 315 315 Montserrat Pascual (until Q1 2023) 99 476 Anette Weber 158 113 Wolfgang Reim - 45 Total Board of Directors travel allowance and social security 1,032 1,541
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5.3 Share-based incentive plans
Option and warrant programs
GN Store Nord has an option-based and a warrant-based long-term
equity-settled incentive program whereby the Executive Management
and other employees in key positions are granted options and warrants
linked to shares in GN Store Nord A/S, GN Hearing A/S and GN Audio
A/S. For members of Executive Management the grant size can vary be-
tween 50-100% of their base salary. Warrants and options are granted
at no consideration.
Calculation of share price for GN Hearing A/S and GN Audio A/S
The 2019-202 3 option programs are based on GN Store Nord A/S shares,
whereas the warrant programs for 2015-2018 are based on GN Hearing
A/S and GN Audio A/S shares. On a quarterly basis the share price for GN
Hearing A/S and GN Audio A/S is calculated, using a top-down approach
based on analysis of external broker reports for the allocation of GN
Store Nord A/S’ share price into GN Hearing, GN Audio and Other. This
calculation is also the basis for the Black-Scholes valuation as stated be-
low regarding valuation of warrants.
Vesting conditions and exercise of warrants
The 2015-2018 warrant programs are incentive programs with a three-
year vesting period from the grant date. Warrants vest when a set of cri-
teria are met: The share price of GN Store Nord has increased and the
share price of GN Hearing A/S and GN Audio A/S has outperformed a
peer group index of competitors and industry indices, as defined by the
Board of Directors of GN Hearing and GN Audio, respectively. Vested
warrants may be exercised during a four-week exercise window opening
each quarter for a three-year period after vesting. The quarterly four-
week exercise window will open following the release of an external Val-
uation Report concerning the value of the shares of GN Hearing A/S and
GN Audio A/S.
Vesting conditions and exercise of options
The 2019-2023 programs are long-term incentive programs with a three-
year vesting period from the grant date. The programs include a perfor-
mance multiplier, based on revenue growth and EBITDA improvement
relative to a broad peer group of comparable companies. This means,
that after the three-year vesting period, the initial share option grant
can either increase, decrease or stay the same, depending on GN’s per-
formance relative to a peer group. The maximum effect of the perfor-
mance multiplier is to decrease the number of options to 0 or increase
the number of options by a factor of 2. For executive management the
gross return on each annual grant is capped at a value equal to four
times the annual base salary at the time of grant. Vested options may be
exercised at any time outside black-out periods for a three-year period
after vesting.
Valuation model and assumptions
The fair value of the warrants and options are calculated using the prin-
ciples of the Black-Scholes option pricing model. For the 2015-2018 war-
rants the model has taken the overperformance criteria into account us-
ing Monte Carlo simulation. The fair values of options granted during
the year are based on the underlying market prices at the grant dates.
The exercise price for the annual ordinary grant of options is based on
the average share price for GN Store Nord A/S in the five days following
the release of the annual report in the year in which the options are
awarded.
The following assumptions were applied for the calculation of the fair value at the grant date of GN Store Nord A/S options:
Executive Management Other employees 2023 2022 2023 2022 Number of options awarded in the year 296,139 145,500 1,514,675 815,593 Share price of GN Store Nord A/S at ordinary grant date 167 351 167 351 Vesting period 3 years 3 years 3 years 3 years Life of option 6 years 6 years 6 years 6 years Volatility* 43% 34% 42% 35% Expected dividend 0.4% 0.3% 0.5% 0.4% Risk-free interest rate** 2.52% 0.12% 2.72% 0.35% Fair Value per option at ordinary grant (DKK)*** 46 81 61 100 Total market value at grant (DKK million) 17 12 93 77 Amortization period of the program 2023 - 2026 2022 - 2025 2023 - 2026 2022 - 2025 * Volatility is estimated by external experts, and is calculated based on data from a historical period matching the expected time to expiry of the options ** Risk-free interest rate is estimated by external experts and based on the zero yield curve derived from Danish government bonds with maturity equal to the expiry of the options *** The fair value assumes a performance multiplier of 1
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5.3 Share-based incentive plans (Continued)
Exercise of warrants
When employees exercise their warrants they are exchanged with shares
in GN Store Nord A/S based on the relationship between the value of the
warrant and the value of the GN Store Nord A/S share at the time of ex-
ercise. Hereafter the employee is free to keep the GN Store Nord A/S
shares or sell them in the open market.
Average share price at exercise for GN Store Nord and GN Audio is
DKK 33,913.
GN Store Nord A/S GN Hearing A/S GN Audio A/S DKK Number of options* DKK Number of warrants DKK Number of warrants Average Executive Average Executive Average Executive exercise Manage-Other exercise Manage-Other exercise Manage-Other price ment employees Total price ment employees Total price ment employees Total Outstanding at January 1, 2022 395 448,726 1,421,458 1,870,184 32,632 - 1,474 1,474 31,777 1,150 336 1,486 Granted during the year 325 145,500 815,593 961,093 - - - - - - - - Option increase from multiplier at vesting 313 130,261 401,300 531,561 Exercised during the year 313 - -11,076 -11,076 N/A - - - 29,227 -494 -132 -626 Forfeited during the year 343 - -298,535 -298,535 33,352 - -652 -652 28,794 - -47 -47 Outstanding at December 31, 2022 366 724,487 2,328,740 3,053,227 32,062 - 822 822 33,913 656 157 813 Granted during the year 164 296,139 1,514,675 1,810,814 - - - - - - - - Exercised during the year N/A - - - N/A - - - 33,913 -656 -148 -804 Forfeited during the year 362 -168,762 -650,421 -819,183 32,062 - -822 -822 33,913 - -9 -9 Outstanding at December 31, 2023 279 851,864 3,192,994 4,044,858 - - - - - - - - Weighted average term to maturity (Years) 3.3 3.9 3.8 N/A N/A N/A N/A N/A N/A Exercisable at December 31, 2022 313,725 737,222 1,050,947 - 822 822 656 157 813 Exercisable at December 31, 2023 313,725 701,869 1,015,594 - - - - - - * Recognition of expenses on options granted are accelerated for participants not forfeiting the vesting conditions in connection with terminations (good leavers) unless a service is provided in the remaining vesting period. The recognized expenses in 2023 include acceleration of 188,750 and 24,093 options granted to Executive Management and Other employees, respectively, of GN Hearing A/S, 140,401 options granted to Other employees of GN Audio A/S, and 27,537 options granted to Other employees of GN Store Nord A/S.
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5.3 Share-based incentive plans (Continued)
Outstanding warrants and options at December 31, 2023 by grant date
are shown below:
GN Store Nord A/S DKK Number of options* Exercise Executive Other Grant date price Management employees Total 313 237,812 692,870 930,682 April 2019** 325 - 8,999 8,999 June 2019** 282 75,913 - 75,913 September 2019** 550 96,500 310,826 407,326 February 2021 495 - 3,595 3,595 May 2021 409 - 6,851 6,851 January 2022 368 145,500 478,970 624,470 February 2022 307 - 36,121 36,121 March 2022 224 - 211,064 211,064 May 2022 209 - 8,855 8,855 September 2022 164 94,000 1,426,241 1,520,241 February 2023 151 97,300 - 97,300 March 2023 149 - 4,215 4,215 April 2023 170 104,839 - 104,839 June 2023 125 - 4,387 4,387 October 2023 Outstanding at December 31 851,864 3,192,994 4,044,858 * The performance multiplier can decrease the number of non-vested options to 0 or as maximum effect increase the number by a factor of two. ** For the 2019 program, number of options have increased by final multiplier of 1.71
Accounting policies
Share-based incentive plans
The Executive Management and a number of key employees are included in
share-based incentive plans (equity-settled plans). For equity-settled pro-
grams, the warrants and options are measured at the fair value at the
grant date and recognized in the income statement as a staff cost of the
respective functions over the vesting period. The counter item is recog-
nized in equity. On initial recognition, an estimate is made of the number of
warrants and options expected to vest. This estimate is subsequently re-
vised for changes in the number of warrants and options expected to vest.
Accordingly, recognition is based on the number of warrants and options
that are ultimately vested. The fair value of granted warrants and options
is estimated using the Black-Scholes option pricing model. Vesting condi-
tions are taken into account when estimating the fair value of the warrants
and options.
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5.4 Pension obligations
DKK million 2023 2022 Present value of defined benefit obligations 129 301 Fair value of plan assets -153 -321 Net obligations -24 -20 Of which is included in other non-current assets, refer to note 3.5 -33 -29 Of which is included in pension obligations 9 7 The present value of defined benefit obligations includes un-funded pension obligations not covered by payments to insur-ance companies of DKK 19 million (2021: DKK 19 million). Development in present value of defined benefit obligations Obligations at January 1 301 359 Foreign exchange adjustments -15 19 Costs for the year 3 4 Interest expense 13 8 Actuarial (gains) losses regarding demographic assumptions - - Actuarial (gains) losses regarding financial assumptions 2 -69 Pension payments -175 -20 Obligations at December 31 129 301 Maturity of pension obligations Less than one year 3 22 Between one and five years 16 89 More than five years 110 190 Total 129 301 Development in fair value of plan assets Plan assets at January 1 321 367 Foreign exchange adjustments -10 20 Interest income 14 9 Return on plan assets in excess of interest income - -62 Payment by GN Store Nord 2 2 Pension payments -174 -15 Plan assets at December 31 153 321
DKK million 2023 2022 Pension costs recognized in the income statement Costs for the year -3 -4 Interest expense -13 -10 Interest income from plan assets 14 9 Defined benefit plans total -2 -5 Defined contribution plans total -194 -209 Total pension costs recognized in the income statement -196 -214 The costs are recognized in the following income statement items: Production costs -14 -28 Development costs -56 -58 Selling and distribution costs -67 -64 Management and administrative expenses -60 -57 Financial expenses 1 -7 Total -196 -214 The following accumulated actuarial gains (losses) since Janu-ary 1, 2005 are recognized in the Statement of other Compre-hensive Income Accumulated actuarial gains (losses) -20 -22 Breakdown of plan assets Shares 0% 59% Bonds 46% 38% Cash and cash equivalents 54% 3% Total 100% 100%
At the balance sheet date the actuarial calculations for the prevailing
American defined benefit plan are based on a discount rate of 5.00%
(2022: 2.75%).
A 25 basis point decrease in the discount rate will result in a DKK 4 mil-
lion increase in the defined benefit obligation and a 25 basis point in-
crease will result in a DKK 4 million decrease in the defined benefit obli-
gation.
Defined contribution plans
The Group has pension commitments regarding certain groups of em-
ployees in Denmark and abroad. Pension plans are generally defined
contribution plans. The pension plans are funded by current payments
to independent pension funds and insurance companies, which are re-
sponsible for payment of the pension benefits. When contributions to
defined contribution plans have been paid, the Group has no further
commitments to present or former employees. Contributions to defined
contribution plans are recognized in the income statement when they
are due.
Defined benefit plans
The Group has an American pension plan, which is not covered by pay-
ments to insurance companies but is partly off-set by the fair value of re-
served pension funds. At July 1, 2003, the pension plan was frozen,
meaning that employees covered by the plan will continue to be entitled
to the pension payments earned up to this date. However, employees
will not earn further pension payments.
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5.4 Pension obligations (Continued)
5.5 Contingent liabilities
DKK million 2023 2022 Guarantees - 4
Guarantees
The majority of guarantees are related to performance guarantees.
Security
The Group has not pledged any assets as security in the present or prior
financial years.
Purchase obligations
GN Store Nord has agreed with a number of suppliers that the suppliers
will purchase components for the production of hearing instruments and
headsets based on sales estimates prepared by GN Store Nord. To the
extent that GN Store Nord's sales estimates exceed
actual purchases from suppliers, GN Store Nord is under an obligation to
purchase any remaining components from the suppliers.
Management assesses sales estimates on an ongoing basis. To the
extent that component inventories at suppliers exceed the volumes
expected to be used, GN Store Nord recognizes a provision for onerous
purchase contracts.
Pending litigations and disputes
GN Store Nord and its subsidiaries are parties to pending litigations,
claims and disputes arising out of the normal conduct of their business
including various cases involving patent infringements. While provisions
that management deems to be reasonable and appropriate have been
made for probable losses, there are uncertainties connected with these
estimates. GN Store Nord does not expect the pending litigations and
claims to have a material impact on GN Store Nord’s financial position,
operating profit or cash flows in addition to the amounts recognized as
provisions for legal disputes.
Accounting policies
Pensions
Contributions to defined contribution plans are recognized in the income
statement in the period to which they relate and any contributions
outstanding are recognized in the balance sheet as other payables.
Defined benefit plans are subject to an annual actuarial estimate of the
present value of future benefits under the defined benefit plan. The
present value is determined on the basis of assumptions about the future
development in variables such as salary levels, interest rates, inflation and
mortality. The present value is determined only for benefits earned by
employees from their employment with the Group. The actuarial present
value less the fair value of any plan assets is recognized in the balance
sheet under pension obligations. Pension costs for the year are recognized
in the income statement based on actuarial estimates and financial
expectations at the beginning of the year. Any difference between the
expected development in plan assets and the defined benefit obligation
and actual amounts results in actuarial gains or losses. Actuarial gains or
losses are recognized in other comprehensive income.
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5.6 Investments in associates
DKK million 2023 2022 Aggregated financial information for associates: Total share of profit (loss) in associates, including impairments -64 19 Total share of net assets in associates 276 319 Carrying amount of associates 276 319
Transactions with associates comprise sale of goods of DKK 101 million
(2022: DKK 229 million) and purchase of services, licenses and other as-
sets of DKK 0 million (2022: DKK 13million) . At year end GN has DKK 43
million (2022: DKK 119million) in receivables from associates.
5.7 Other non-cash adjustments
DKK million 2023 2022 Share-based payment (granted) -67 111 (Gain) loss on divestment of operations - -9 Loss allowance on trade receivables, inventory write- 154 downs, etc. 40 Adjustment of provisions 123 -84 Total 210 58
5.8 Fees to statutory auditors
DKK million 2023 2022 Statutory audit -11 -11 Tax advice services -1 -1 Other services -5 -5 Total -17 -17 Note: PwC's global non-audit service fees amount to 4 9% when considering decimals.
Fees for services other than statutory audit of the financial statements
amounts to DKK 6 million (2022: DKK 6 million).
Services other than statutory audit of the financial statements provided
by PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab
(PricewaterhouseCoopers Denmark) mainly consist of tax related advice,
transaction/project support, project support in connection with capital
raise, technical accounting advisory services, other advisory services and
other assurance assessments and opinions.
5.9 Related parties
No single entity or person has control or exercises significant influence
over the GN Group as a whole. Key Management personnel and associ-
ated companies are the sole related parties of the Group. Transactions
with Key Management personnel constitute remuneration, as disclosed
in note 5.2 Remuneration of the Board of Directors and Executive Man-
agement and 5.3 Share-based incentive plans, and transactions with as-
sociates are disclosed in note 5.6 Investments in associates.
5.10 Events after the reporting period
No material subsequent events have occurred.
Accounting policies
Investments in Associates in the Consolidated Financial Statements
On acquisition of investments in associates, the purchase method is used,
cf. Business Combinations.
In the consolidated financial statements investments in associates are rec-
ognized according to the equity method. Investments in associates are
measured at the proportionate share of the enterprises’ net asset values
calculated in accordance with the Group’s accounting policies minus or
plus the proportionate share of unrealized intra-group profits and losses
and plus the carrying amount of goodwill.
Profit (loss) from Investments in Associates
The proportionate share of the profit (loss) after tax of the individual asso-
ciates is recognized in the income statement of the Group after elimination
of the proportionate share of intra-group profits (losses).
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Domicile Currency Ownership % Share capital GN Store Nord A/S Denmark DKK 603,650,860 GN Ejendomme A/S Denmark DKK 100 115,625,000 GN Financing A/S Denmark DKK 100 400,000 GN Audio A/S Denmark DKK 100 35,252,000 Falcom A/S Denmark DKK 100 88,503,000 GN Audio DK Sales A/S Denmark DKK 100 400,000 GN Audio Australia Pty Ltd. Australia AUD 100 2,500,000 GN Áudio Brasil Importacão & Comércio Ltda. Brazil BRL 100 407,821 GN Audio Canada Inc. Canada CAD 100 409,800 GN Audio (China) Ltd. China CNY 100 65,252,600 GN Audio (Shanghai) Co., Ltd. China CNY 100 15,481,000 GN Audio Logistic (Xiamen) Ltd. China CNY 100 4,133,738 GN Audio France SA France EUR 100 80,000 GN Audio Germany GmbH Germany EUR 100 51,100 GN Audio Hong Kong Limited Hong Kong HKD 100 33,500,000 GN Audio India Private Limited India INR 100 40,000,000 Jabra Connect India Private Limited India INR 51 20,000,000 GN Audio Italy s.r.l. Italy EUR 100 10,200 GN Audio Japan Ltd. Japan JPY 100 10,000,000 GN Audio Benelux B.V.** Netherlands EUR 100 18,000 GN Audio Philippines, Inc. Philippines PHP 100 10,000,000 GN Audio Poland Sp. Z.o.o. Poland PLN 100 50,000 GN Audio Singapore Pte. Ltd. Singapore SGD 100 700,000 Jabra Connect Singapore Pte.Ltd. Singapore USD 51 12,000 GN Audio Spain, S.A. Spain EUR 100 66,111 GN Audio Sweden AB Sweden SEK 100 5,100,000 GN Audio UK Ltd.*** United Kingdom GBP 100 100,000 GN Audio USA Inc. USA USD 100 82,500,000 Falcom US, LLC* USA USD 100 - SteelSeries APS Denmark DKK 100 160,000 SteelSeries France S.A.S France EUR 100 2,363,600 Nahimic Singapore SGD 100 341,001 GN Audio Finland Oy/Ab Finland EUR 100 - GN Audio Norway AS Norway NOK 100 30,000 3D Aim Trainer BV Belgium EUR 100 2,079,502
Domicile Currency Ownership % Share Capital GN Hearing A/S Denmark DKK 100 65,252,600 GN Hearing 2 A/S Denmark DKK 100 500,000 GN Financing 2 A/S Denmark DKK 100 400,000 GN Hearing Australia Pty. Ltd. Australia AUD 100 4,000,002 GN Hearing Austria GmbH Austria EUR 100 482,500 GN ReSound Produtos Médicos Ltda. Brazil BRL 100 1,019,327 GN Hearing Care Canada Ltd. Canada CAD 100 8,435,000 GN Hearing Shanghai Ltd. China CNY 100 20,491,300 GN ReSound China Ltd. China CNY 100 34,000,000 GN Hearing Czech Republic spol. s r.o. Czech Republic CZK 100 102,000 Audigy Group International A/S Denmark DKK 100 400,000 Dansk Hørecenter ApS Denmark DKK 100 165,657,000 GN Hearing Finland Oy/Ab Finland EUR 100 55,502 GN Hearing SAS France EUR 100 2,300,000 GN Hearing GmbH Germany EUR 100 296,549 GN ReSound GmbH Hörtechnologie Germany EUR 100 2,162,253 GN Hearing India Private Limited India INR 100 20,983,210 GN Hearing S.r.l. Italy EUR 100 181,190 GN Hearing Japan K.K. Japan JPY 100 499,000,000 GN Hearing Korea Co., Ltd. Korea KRW 100 136,700,000 GN Hearing (Malaysia) Sdn Bhd Malaysia MYR 100 2,500,000 GN Hearing Benelux B.V. Netherlands EUR 100 680,670 GN Hearing New Zealand Limited New Zealand NZD 100 2,000,000 GN Hearing Norway AS Norway NOK 100 2,000,000 GN Hearing Care S.A. Spain EUR 100 66,110 GN Hearing Sverige AB Sweden SEK 100 100,000 GN Hearing Switzerland AG Switzerland CHF 100 500,000 GN Hearing UK Ltd. United Kingdom GBP 100 7,376,000 GN Consumer Hearing Cooperation USA USD 91 32,061,457 GN US Holdings Inc. USA USD 100 36,000,000 Great Hearing Benefits, LLC* USA USD 100 - Beltone Holdings US, LLC USA USD 100 3,000 Beltone Hearing Care Foundation* USA USD 100 - GN Hearing Care Corporation USA USD 100 190,000
Companies in GN Group
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Companies in the GN Group (Continued)
Domicile Currency Ownership % Share capital GN Hearing A/S continued: Audigy Group, LLC* USA USD 100 - Audigy Venture, LLC* USA USD 100 - Associates Audio Nova S.R.L. Romania ROL 49 1,000 Himpp A/S Denmark DKK 11 1,600,000 Hearing Instrument Manufactures Software Association A/S Denmark DKK 25 1,000,000 HIMSA II A/S Denmark DKK 17 500,000 Himsa II K/S Denmark DKK 15 3,250,000 K/S Himpp Denmark USD 9 19,950,000 Progetto Udire S.R.L. Italy EUR 35 838,700 Hearing Center of the East Bay, LLC USA USD 50 25,000 BelMart LLC USA USD 30 3,556,822 Bold North Beltone, LLC* USA USD 30 - AXE Audiology, LLC* USA USD 30 - Statewide Hearing, LLC* USA USD 30 - Beltopia LLC USA USD 25 1,734,500 HearX Group (pty) LTD South Africa USD 27 31,000,000 Louqe AB Corporation Sweden SEK 26 - * Without par value ** GN Audio Benelux B.V. (registration number 20113074) and GN Hearing Benelux B.V. (registration number 09033081) applies the group exemption of article 2:403 of the Dutch Civil Code and does not prepare individual financial statements. Note: Minor companies have been omitted from the list.
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In this annual report the following financial terms
(non-IFRS measures) are used:
Operating profit (loss) Profit (loss) before tax and financial items. EBITDA Operating profit (loss) before depreciation and impairment of property, plant and equipment, amor-tization and impairment of intangible assets, except development projects, impairment of goodwill and gains (losses) on divestment of operations etc.. EBITDA therefore include amortization of development projects. EBITA Operating profit (loss) before amortization and impairment of acquired intangible assets, impair-ment of goodwill and gains (losses) on divestment of operations etc. EBITA therefore include amor-tization of development projects and software developed in-house. Free cash flow Cash flow from operating and investing activities Convertible bond EUR 330 million senior unsecured zero coupon bonds due 2024 with detachable unsecured warrant units expiring 2024 (refer to note 4.2 Financial risks). Key Ratio Definitions Organic growth=Absolute organic revenue growth Revenue in comparative period Organic growth is a measure of growth excluding the impact of acquisitions, divestments and for-eign exchange adjustments from year-on-year comparisons. Net working capital (NWC) = Inventories + receivables + other operating current assets - trade payables - other operating current liabilities Net interest bearing debt (NIBD) = Bank loans and issued bonds + Lease liabilities - Cash and cash equivalents - Loans to dispensers Dividend payout ratio = Total dividend Profit (loss) for the year Gross margin = Gross profit Revenue EBITA margin = EBITA Revenue ROIC (Return on invested =EBITA capital including goodwill) Average invested capital including goodwill
Invested capital = NWC + property, plant and equipment and intangible assets + loans to dispensers of GN Hearing products + pre-paid discounts + ownership interests – provisions Cash conversion = Free cash flow excl. company acquisitions and divestments EBITA Return on equity (ROE)=Profit (loss) for the year Average equity of the Group Equity ratio = Equity of the Group Total assets Earnings per share, basic (EPS) = Profit (loss) for the year attributable to shareholders in GN Store Nord A/S Average number of shares outstanding Earnings per share, fully diluted = Profit (loss) for the year attributable to shareholders in GN Store Nord A/S (EPS diluted)Average number of shares outstanding, fully diluted Market capitalization Number of shares outstanding x share price at the end of the period Outstanding shares Number of shares listed - treasury shares
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Income statements 134
Statement of comprehensive income 134
Balance sheet at December 31 135
Statement of cash flow 136
Statement of equity 137
Parent Company
Financial
statements
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Annual Report 2023 Financial Statements – Parent Company
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DKK million
Note
2023
2022
Revenue
738
682
Gross profit
738
682
Development costs
-66
-80
Management and administrative expenses
1, 2, 3, 4
-1,021
-793
Other operating income and costs, net
-23
-7
Operating profit (loss)
-372
-198
Share of profit after tax in subsidiaries
10
670
1,015
Share of profit (loss) in associates
11
-33
-
Financial income
5
432
190
Financial expenses
5
-418
-537
Profit (loss) before tax
279
470
Tax on profit (loss)
6
-51
41
Profit (loss) for the year
228
511
Proposed profit appropriation/distribution of loss
Transferred to reserve for net revaluation according to the equity method
670
1,015
Transferred to reserve for development projects
615
247
Retained earnings
-1,057
-751
228
511
DKK million
2023
2022
Profit (loss) for the year
228
511
Other comprehensive income
Items that will not be reclassified subsequently to the income statement
Other changes in equity in subsidiaries
-
5
Items that may be reclassified subsequently to the income statement
Foreign exchange adjustments, etc.
-279
258
Other changes in equity in subsidiaries
60
-57
Tax relating to other comprehensive income
-11
-
Other comprehensive income for the year
-230
206
Total comprehensive income for the year
-3
717
Income statement
Statement of
comprehensive income
135/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
DKK million
Note
2023
2022
Assets
Intangible assets
7
1,694
904
Property, plant and equipment
8, 9
43
77
Investments in subsidiaries
10
16,587
10,455
Investments in associates
11
-
33
Amounts owed by subsidiaries
14
4,145
12,281
Other non-current assets
4
-
Total non-current assets
22,473
23,750
Tax receivables
61
159
Other receivables
14
339
293
Cash and cash equivalents
681
406
Total current assets
1,081
858
Total assets
23,554
24,608
Equity and liabilities
Share capital
604
549
Other reserves
2,865
1,024
Retained earnings
6,118
5,227
Total equity
9,587
6,800
Bank loans and issued bonds, non-current
14, 17
3,024
9,860
Lease liabilities, non-current
9, 14
18
38
Deferred tax liabilities
12
86
34
Total non-current liabilities
3,128
9,932
Bank loans and issued bonds, current
14, 17
9,674
6,005
Lease liabilities, current
9, 14
8
14
Trade payables
14
125
121
Amounts owed to subsidiaries
14, 17
749
1,411
Provisions, current
49
-
Other payables
14
234
325
Total current liabilities
10,839
7,876
Total equity and liabilities
23,554
24,608
Balance sheet at December 31
136/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
Statement of cash flows
DKK million
Note
2023
2022
Operating activities
Operating profit (loss)
-372
-198
Depreciation, amortization and impairment
3
208
104
Other non-cash adjustments
40
19
Cash flow from operating activities before changes in working capital
-124
-75
Change in receivables
-89
-100
Change in trade payables and other payables
-1
114
Total changes in working capital
-90
14
Cash flow from operating activities before financial items and tax
-214
-61
Interest and dividends, etc. received
405
2,220
Interest paid
-332
-485
Tax paid, net
187
-70
Cash flow from operating activities
46
1,604
Investing activities
Investments in intangible assets
7
-980
-393
Investments in tangible assets
8
-1
-1
Investments in non-current assets
-4
-
Amounts owed by subsidiaries
1,858
-8,262
Cash flow from investing activities
873
-8,656
Cash flow from operating and investing activities (free cash flow)
919
-7,052
Financing activities
Increase of long-term loans
17
-1,149
1,925
Decrease of short-term loans and amounts owed to subsidiaries
17
-2,135
-33
Proceeds from share placement, net of costs
17
2,621
-
Paid dividends
-
-198
Share-based payment (exercised)
19
3
Cash flow from financing activities
-644
1,697
Net cash flow
275
-5,355
Cash and cash equivalents, beginning of period
406
5,761
Cash and cash equivalents, end of period
681
406
137/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
2023
Other reserves
DKK million
Share
capital*
Hedging
reserve
Treasury
shares
Reserve
according
to the
equity
method
Reserve
for
developm
ent
projects
Proposed
dividends
for the
year
Retained
earnings
Total
equity
Balance at January 1, 2023
549
-
-3,366
3,684
706
-
5,227
6,800
Profit (loss) for the period
-
-
-
670
95
-
-537
228
Adjustment of cash flow hedges
-
-
-
-
-
-
-
-
Other changes in equity in subsidiaries
-
-
-
60
-
-
-
60
Foreign currency translation adjust-
ments of investments in subsidiaries
etc.
-
-
-
-279
-
-
-
-279
Tax relating to other comprehensive
income
-
-
-
-13
-
2
-11
Other comprehensive income for the
year
-
-
-
-232
-
-
2
-230
Total comprehensive income for the
year
-
-
-
438
95
-
-535
-2
Increase in share capital, net of costs
55
-
-
-
-
-
2,021
2,076
Other changes in equity in subsidiaries
-
-
-
147
-
-
-
147
Purchase of ownership interests in
subsidiaries by payment in treasury
shares
-
-
96
-
-
-
-69
27
Share-based payment (granted)
-
-
-
-
-
-
-6
-6
Treasury shares placement, net of
costs
-
-
545
-
-
-
-
545
Balance at December 31, 2023
604
-
-2,725
4,269
801
-
6,638
9,587
The reserve according to the equity method includes foreign exchange adjustments of DKK -1,062 million
(2022: DKK -846 million). Retained earnings, which are available for distribution from the Parent Company
amounts to DKK 4,008 million (2022: DKK 1,861 million).
2022
Other reserves
DKK million
Share
capital*
Hedging
reserve
Treasury
shares
Reserve
according
to the
equity
method
Reserve
for
developm
ent
projects
Proposed
dividends
for the
year
Retained
earnings
Total
equity
Balance at January 1, 2022
553
6
-3,731
2,448
459
214
6,280
6,229
Profit (loss) for the period
-
-
-
1,015
247
-
-751
511
Adjustment of cash flow hedges
-
-6
-
-
-
-
6
-
Other changes in equity in subsidiaries
-
-
-
-52
-
-
-
-52
Foreign currency translation adjust-
ments of investments in subsidiaries
etc.
-
-
-
258
-
-
-
258
Other comprehensive income for the
year
-
-6
-
206
-
-
6
206
Total comprehensive income for the
year
-
-6
-
1,221
247
-
-745
717
Reduction of the share capital
-4
-
297
-
-
-
-293
-
Other changes in equity in subsidiaries
-
-
-
15
-
-
-
15
Purchase of ownership interests in
subsidiaries by payment in treasury
shares
-
-
68
-
-
-
-46
22
Share-based payment (granted)
-
-
-
-
-
-
15
15
Paid dividends
-
-
-
-
-
-198
-
-198
Dividends, treasury shares
-
-
-
-
-
-16
16
-
Balance at December 31, 2022
549
-
-3,366
3,684
706
-
5,227
6,800
Statement of changes in equity
138/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
Notes – Income statement and balance sheet
1 Staff costs 139
2 Share-based incentive plans 139
3 Depreciation, amortization and impairment 140
4 Fees to statutory auditors 140
5 Financial income and expenses 141
6 Tax 141
7 Intangible assets 142
8 Property, plant and equipment 143
9 Leases 144
10 Investments in subsidiaries 145
11 Investments in associates 145
12 Deferred tax 145
13 Contingent assets and liabilities 145
Notes – Other disclosures
14 Financial instruments 146
15 Outstanding shares and treasury shares 147
16 Related party transactions 147
17 Liabilities from financing activities 148
18 Accounting policies 148
Parent Company
notes
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
138/157
139/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
1 Staff costs
DKK million
2023
2022
Wages, salaries and remuneration
316
261
Pensions
27
27
Share-based incentives
6
10
Other social security costs
2
2
Total
351
300
Executive Management remuneration can be specified
as follows:
Fixed pay*
15.2
4.0
Short term incentives
13.2
1.1
Share-based incentives
-0.3
2.2
Total
28.1
7.3
Board of Directors remuneration
6.2
6.4
Total remuneration
34.3
13.7
Staff costs are included in Management and adminis-
trative expenses.
Average number of employees
359
351
Number of employees at year-end
354
373
* Fixed pay include Base salary and Other benefits. Other benefits include car allowances,
company paid telephone and internet cost.
For information regarding Executive Management and Board of Direc-
tors total remuneration please refer to note 5.2 Remuneration of the
Board of Directors and Executive Management in the consolidated
financial statements.
2 Share-based incentive plans
For 2019-2023 a share-based incentive plan has been implemented in
GN Store Nord. For a description of this, see note 5.3 Share-based in-
centive plans in the consolidated financial statements. The following
assumptions were applied for the calculation of the fair value at the
grant date of the options:
Recognition of expenses on options granted are accelerated for partici-
pants not forfeiting the vesting conditions in connection with termina-
tions (good leavers) unless a service is provided in the remaining vest-
ing period. The recognized expenses in 2023 include acceleration of
27,537 options granted to Other employees of GN Store Nord A/S.
Executive Management
Other employees
2023
2022
2023
2022
Number of option awarded in the year
202,139
26,500
118,820
61,483
Share price GN Store Nord at ordinary grant date
167
351
167
351
Vesting period
3 years
3 years
3 years
3 years
Life of option
6 years
6 years
6 years
6 years
Volatility*
43%
34%
42%
34%
Expected dividend
0.4%
0.3%
0.5%
0.4%
Risk-free interest rate**
2.43%
0.00%
2.72%
0.00%
Fair Value per option at ordinary grant (DKK)***
46
81
61
100
Total fair value at grant (DKK million)
12
2
7
6
Amortization period of the program
2023 - 2026
2022 - 2025
2023 - 2026
2022 - 2025
* Volatility is estimated by external experts, and is calculated based on data from a historical period matching the expected time to expiry of the options
** Risk-free interest rate is estimated by external experts and based on the zero yield curve derived from Danish government bonds with maturity equal to the expiry of the options
*** The fair value assumes a performance multiplier of 1
140/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
2 Share-based incentive programs
(Continued)
3 Depreciation, amortization and
impairment
Depreciation, amortization and impairment for the year of property,
plant and equipment (incl. leased assets) and intangible assets of DKK
208 million (2022: DKK 104 million), is recognized in the income state-
ment as management and administrative expenses.
4 Fees to statutory auditors
DKK million
2023
2022
Statutory audit
-3
-3
Tax advice services
-1
-1
Other services
-4
-3
Total
-8
-7
Services other than statutory audit are described in note 5.8 Fees to
statutory auditors in the consolidated financial statements.
DKK
Number*
Average
exercise
price
Executive
Management
Other
employees
Total
Outstanding options at January 1, 2022
392
131,378
147,886
279,264
Options granted during the year
348
26,500
67,611
94,111
Option increase from multiplier at vesting
313
45,116
35,904
81,020
Options forfeited during the year
387
-
-19,655
-19,655
Outstanding options at December 31, 2022
375
202,994
231,746
434,740
Options granted during the year
167
202,139
118,820
320,959
Options forfeited during the year
378
-49,585
-84,621
-134,206
Outstanding options at December 31, 2023
284
355,548
265,945
621,493
Weighted average term to maturity (Years)
2.2
2.2
2.2
Number of exercisable options at December 31, 2022
108,659
84,319
192,978
Number of exercisable options at December 31, 2023
108,659
84,319
192,978
* The performance multiplier can decrease the number of options to 0 or as maximum effect increase the number of options by a factor of 2
DKK
Number*
Grant date
Exercise
price
Executive
Management
Other
employees
Total
April 2019**
313
108,659
91,591
200,250
February 2021
550
18,250
28,310
46,560
May 2021
495
-
3,595
3,595
February 2022
368
26,500
37,893
64,393
March 2022
307
-
3,158
3,158
February 2023
164
-
101,398
101,398
March 2023
151
97,300
-
97,300
June 2023
170
104,839
-
104,839
Outstanding options at December 31, 2023
355,548
265,945
621,493
* The performance multiplier can decrease the number of options to 0 or as maximum effect increase the number of options by a factor of 2
** For the 2019 program, number of options have increased by final multiple of 1.71
141/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
5 Financial income and expenses
DKK million
2023
2022
Financial income
Interest income from subsidiaries*
354
181
Interest income from bank balances*
14
-
Financial income, other
1
9
Fair value adjustment of derivative financial instru-
ments, net
63
-
Total
432
190
Financial expenses
Interest expense to subsidiaries*
-8
-18
Interest expenses on bank loans and issued bonds*
-310
-181
Financial expenses, other
-89
-38
Fair
value adjustment of derivative financial instru-
ments, net
-
-278
Foreign exchange loss
-11
-22
Total
-418
-537
* Interest income and expenses from financial assets and liabilities at amortized cost
6 Tax
DKK million
2022
2021
Tax on profit (loss)
Current tax for the year
119
37
Deferred tax for the year
-45
1
Adjustment to current tax in respect of prior years
7
11
Adjustment to deferred tax in respect of prior years
-7
-8
Total
74
41
Reconciliation of effective tax rate
Danish tax rate
22.0%
22.0%
Non-taxable income
0.9%
0.0%
Non-deductible expenses
-2.5%
0.1%
Adjustment of tax with respect of prior years
0.0%
0.0%
Share of profit (loss) in subsidiaries
6.2%
-47.6%
Share of profits (loss) in associates
0.0%
0.0%
Other, including provisions for uncertain tax positions
0.0%
16.6%
Effective tax rate
26.6%
-8.8%
In 2023, the company paid preliminary taxes of DKK 98 million in Dan-
ish corporate income tax for the year on behalf of the joint Group taxa-
tion (For the year 2022 DKK 21 million was paid in final tax for the year
in Danish corporate income tax).
142/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
7 Intangible assets
The carrying amount includes software in progress of DKK 642 million
(2022: DKK 736 million).
2023
2022
DKK million
Software
Patents and licenses
Total
Software
Cost at January 1
1,374
-
1,374
980
Additions
313
667
980
394
Transfers
-
-
-
-
Other adjustments
-
-
-
-
Cost at December 31
1,687
667
2,354
1,374
Amortization and impairment at January 1
-469
-
-469
-391
Amortization
-58
-
-58
-78
Impairment
-133
-
-133
-
Transfers
-
-
-
-
Amortization and impairment at December 31
-660
-
-660
-469
Carrying amount at December 31
1,027
667
1,694
905
Amortized over
3-10 years
3-10 years
3-10 years
143/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
8 Property, plant and equipment
2023
2022
DKK million
Factory and office
buildings
Operating
assets and equip-
ment
Total
Factory and office
buildings
Operating
assets and equip-
ment
Total
Cost at January 1
-
63
63
-
62
62
Additions
-
1
1
-
1
1
Cost at December 31
-
64
64
-
63
63
Depreciation and impairment at January 1
-
-36
-36
-
-24
-24
Depreciation
-
-6
-6
-
-12
-12
Depreciation and impairment at December 31
-
-42
-42
-
-36
-36
Carrying amount at December 31
-
22
22
-
27
27
Leased assets, c.f. note 9
19
2
21
49
1
50
Total carrying amount at December 31
19
24
43
49
28
77
Operating assets and equipment are depreciated over 2
-7 years.
144/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
9 Leases
Lease liabilities
DKK million
2023
2022
Contractual maturity analysis of lease liabilities:
Less than one year
8
14
Between one and three years
15
28
More than three years
3
11
Total
26
53
The parent company’s leases mainly consist of property leases of e.g.
offices but also include cars and office equipment. Rental contracts are
typically made for fixed periods but may have extension options. Con-
tracts may contain both lease and non-lease components. In such
cases the consideration in the contract is allocated to the lease and
Amounts expensed in the income statement and total cash outflow
DKK million
2023
2022
Interest expense on lease liabilities
1
1
Expense relating to low
-value assets and short-term
leases
2
-
Cash outflow re. lease liabilities
6
10
non-lease components based on their relative stand-alone prices. Lease
terms are negotiated on an individual basis and contain a wide range of
different terms and conditions.
The following right-of-use assets from leases are included in property, plant and equipment:
Leased assets
2023
2022
DKK million
Factory
and office
buildings
Operating
assets and
equipment
Total
Factory
and office
buildings
Operating
assets and
equipment
Total
Carrying amount at January 1
49
1
50
20
1
21
Transfer from a group company
-
-
-
42
-
42
Additions
-
2
2
-
1
1
Disposal
-20
-
-20
Depreciation
-10
-1
-11
-13
-1
-14
Carrying amount at December 31
19
2
21
49
1
50
145/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
10 Investments in subsidiaries
DKK million
2023
2022
Cost at January 1
6,771
6,753
Additions, capital contribution
5,547
18
Cost at December 31
12,318
6,771
Value adjustment at January 1
3,684
4,448
Share of profit after tax in subsidiaries
670
1,015
Foreign currency translation adjustments
-279
258
Direct equity postings in subsidiaries
194
-37
Dividends received
-
-2,000
Value adjustments at December 31
4,269
3,684
Carrying amount at December 31
16,587
10,455
Group companies are listed on page 143.
11 Investments in associates
DKK million
2023
2022
Aggregated financial information for associates is
provided below:
Total share of loss in associates for the year
-33
-
Total share of net assets in associates
-
33
Carrying amount of associates
-
33
12 Deferred tax
DKK million
2023
2022
Deferred tax, net
Deferred tax at January 1, net
-34
-26
Adjustment in respect of prior years
-7
-8
Deferred tax for the year recognized in profit (loss) for
the year
-45
-
Deferred tax at December 31, net
-86
-34
Deferred tax, net relates to
Intangible assets
-220
-40
Other
134
6
Total
-86
-34
13 Contingent assets and liabilities
The parent company has not issued any guarantees on behalf of sub-
sidiaries in 2023 (2022: DKK 0 million).
The company is jointly taxed with all Danish subsidiaries. The company
is jointly and severally liable with the other companies in the joint taxa-
tion for Danish corporate taxes and withholding taxes on dividend, in-
terests and royalties within the joint taxation.
146/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
14 Financial instruments
Categories of financial assets and liabilities
DKK million
2023
2022
Financial assets
Other receivables
220
103
Amounts owed by subsidiaries
4,145
12,281
Financial assets at amortized cost
4,365
12,384
Derivative financial instruments included in Other receivables
119
190
Financial assets at fair value through profit or loss
119
190
Financial liabilities
Issued bonds (bond-with-warrant units), non-current
2,689
2,401
Issued EMTN bonds, non-current
335
5,147
Bank loans, non-current
-
2,312
Bank loans and issued bonds, current
9,674
6,005
Lease liabilities
23
52
Trade payables
125
121
Amounts owed to subsidiaries
749
1,411
Financial liabilities at amortized cost
13,595
17,449
Derivative financial instruments included in Other payables
119
207
Financial liabilities at fair value through profit or loss
119
207
For a description of loans in GN Store Nord, as well as interest rate and
foreign exchange risk on these, please refer to note 4.2 Financial risks
in the consolidated financial statements.
Contractual maturity analysis for financial liabilities
DKK million
Less than
one year
Between
one
and three
years
More than
three
years
Total
2023
Issued bonds
7,053
37
892
7,982
Bank loans
2,548
449
2,029
5,026
Lease liabilities
8
15
3
26
Trade payables
125
-
-
125
Amounts owed to subsidiaries
749
-
-
749
Total non-derivative financial liabilities
10,483
501
2,924
13,908
Derivative financial liabilities
119
-
-
119
Total financial liabilities
10,602
501
2,924
14,027
2022
Issued Bonds
1,716
6,987
899
9,602
Bank loans
4,428
449
2,063
6,940
Lease liabilities
14
28
11
53
Trade payables
121
-
-
121
Amounts owed to subsidiaries
1,411
-
-
1,411
Total non-derivative financial liabilities
7,690
7,464
2,973
18,127
Derivative financial liabilities
207
-
-
207
Total financial liabilities
7,897
7,464
2,973
18,334
Fair value disclosures re. financial instruments at amortized cost
Based on observable inputs (fair value hierarchy level 2) the fair value
of issued bonds (zero coupon) amounted to DKK 2,403 million at De-
cember 31, 2023 (2022: DKK 2,222 million), and the fair value of EMTN
bonds amounted to DKK 4,726 million (2022: DKK 5,918 million). For
other financial assets and liabilities, the fair value is approximately
equal to the carrying amount..
The foreign currency risk in GN Store Nord A/S mainly arises from
translation of receivables, debt and cash balances related to EUR and
USD, of which a large part of the USD risk is related to intercompany
balances. The foreign currency risk is mitigated through non-desig-
nated derivatives. At year end 2023 the FX derivatives had a fair value
of DKK 1 million (2022: DKK -16 million), of which DKK 5 million (2022:
DKK -3 million) are related to derivatives of USD vs EUR or DKK, DKK 1
million (2022: DKK 1 million) are related to derivatives of EUR vs DKK
and DKK -4 million (2022: DKK -14 million) are related to derivatives of
GBP vs DKK. The fair value of derivatives is categorized as level 2 (ob-
servable inputs) in the fair value hierarchy. There were no fair value ad-
justment recognized in other comprehensive income in 2023 and 2022.
147/157
GN Store Nord
Annual Report 2023 Financial Statements – Parent Company
Content
15 Outstanding shares and treasury shares
For information regarding outstanding shares and treasury shares
please refer to note 4.1 Outstanding shares and treasury shares in the
consolidated financial statements.
Funding, liquidity and capital structure is managed at Group level,
please refer to note 4.2 Financial risks in the consolidated financial
statements.
16 Related party transactions
In addition to disclosures given in note 5.9 Related parties, related par-
ties for the parent company comprise group enterprises and associates
over which GN Store Nord A/S exercises control or significant influ-
ence.
Group companies are listed on page 143. Trade with group enterprises
comprised:
DKK million
2023
2022
Sale of services to group enterprises
796
768
Lease income from group enterprises
31
31
Sale of intangible assets to group enterprises
-
-
Purchase of services from group enterprises
-839
-158
Lease costs paid to group enterprises
-40
-40
The parent company's balances with group enterprises at December
31, 2023 are disclosed in the balance sheet. Interest income and
expenses with respect to group enterprises are disclosed in note 5
Financial income and expenses. Further, balances with Group enter-
prises comprise trade balances related to the purchase and sale of
goods and services.
Sale of services to group enterprises consists of facility services, can-
teen services, management fee and IT costs. Purchase of services from
group enterprises mainly consists of facility services and canteen ser-
vices. Furthermore, the parent company has purchased development
services from subsidiaries related to the exploring research projects.
No transactions have been carried out with the Board of Directors, the
Executive Management, senior employees, major shareholders or other
related parties, apart from remuneration disclosed in notes 5.2
Remuneration of the Board of Directors and Executive Management
and 5.3 Share-based incentive plans in the consolidated financial state-
ments.
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Annual Report 2023 Financial Statements – Parent Company
Content
17 Liabilities from financing activities
18 Accounting policies
The financial statements of the parent company, GN Store Nord A/S
have been prepared in accordance with IFRS Accounting Standards as
adopted by the EU and Danish disclosure requirements for annual re-
ports of listed companies. The financial statements have been pre-
pared in accordance with the historical cost convention, as modified by
the revaluation of certain financial instruments (including derivative fi-
nancial instruments) at fair value.
The accounting policies for the financial statements of the parent com-
pany have been changed in line with the changes to accounting policies
described in note 1.1 in the consolidated financial statements. These
changes have not had any material impact on recognition and meas-
urement in the parent company. Apart from the above-mentioned
changes the accounting policies for the financial statements of the par-
ent company are unchanged from the last financial year and are the
same as for the consolidated financial statements with the following
additions:
Supplementary accounting policies for the parent company
Investments in subsidiaries
Revenue in the parent company primarily relates to services rendered
to GN Group companies during the year.
Investments in subsidiaries are accounted for using the equity method
whereby the investment is initially recognized at cost and adjusted
thereafter for the post-acquisition change in the share of the subsidiar-
ies net assets. The share of the subsidiaries profit or loss, less unreal-
ized intra-Group profits, is included in the income statement of the par-
ent company and the share of the subsidiaries other comprehensive in-
come is included in other comprehensive income of the parent com-
pany. Received dividends reduce the carrying amount of the invest-
ments in subsidiaries.
To the extent net profit in subsidiaries exceeds declared or proposed
dividends from such companies, net revaluation of investments in sub-
sidiaries is transferred to Net revaluation reserve under Equity accord-
ing to the equity method.
Management’s report for the GN Parent company
The GN Parent Company reports GN Corporate level activities and
investments into GN Hearing and GN Audio. Revenue in 2023 grew
DKK 56 million (2022: DKK 119 million), primarily due to changes in
the Group Functions. Costs increased during the year includes impair-
ment of software for DKK 133 million. The GN Parent Company applies
the equity method for recognizing share of profit and investments in
subsidiaries and profit for the year and total equity developed in line
with the Group’s overall development. In 2023, cash flow from operat-
ing activities was positively impacted by interests received in the total
amount of DKK 405 million (2022: DKK 2,000 million).
DKK million
Bank loans
Issued bonds
Lease liabilities
Bank loans and
issued bonds,
current
Amounts owed
to subsidiaries
Total
Liabilities at January 1
2,312
7,548
53
6,005
1,411
17,329
Cash flows
-2,312
2,290
-8
-3,262
8
-3,284
Foreign exchange adjustments
-
57
-1
-
-670
-614
New leases and remeasurements
-
-
-15
-
-
-15
Bonds reclassified to current
-
-6,931
-
6,931
-
-
Non-cash interest expenses
-
60
-
-
-
60
Liabilities at December 31, 2023
-
3,024
29
9,674
749
13,476
Liabilities at January 1
372
9,141
22
1,606
4,186
15,327
Cash flows
1,935
-
-11
2,766
-2,799
1,891
Foreign exchange adjustments
5
-19
-
-1
24
9
New leases and remeasurements
-
-
42
-
-
42
Loans reclassified to current
-
-1,634
-
1,634
-
-
Non-cash interest expenses
-
60
-
-
-
60
Liabilities at December 31, 2022
2,312
7,548
53
6,005
1,411
17,329
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GN Store Nord
Annual Report 2023
Content
Statements by the Executive Management and
the Board of Directors
150
Independent Auditor’s Reports
151
Independent limited assurance report on
selected ESG data
155
Statements
GN Store Nord
Annual Report 2023
Content
149/157
150/157
GN Store Nord
Annual Report 2023
Content
Today, the Executive Management and the Board of Directors have dis-
cussed and approved the GN Store Nord Annual Report 2023.
The annual report has been prepared in accordance with IFRS Account-
ing Standards as adopted by the EU and further requirements in the
Danish Financial Statements Act.
It is our opinion that the consolidated financial statements and the par-
ent company financial statements give a true and fair view of the finan-
cial position of the group and the parent company at December 31,
2023 and of the results of the group's and the parent company's opera-
tions and cash flows for the financial year January 1 – December 31,
2023.
Further, in our opinion, the Management's report gives a fair review of
the development in the group's and the parent company's activities
and financial matters, results of operations, cash flows and financial
position as well as a description of material risks and uncertainties that
the group and the parent company face. Management's report has
been prepared in accordance with the requirements of the Danish Fi-
nancial Statements Act and the disclosure requirements of Article 8 of
Regulation (EU) 2020/852 (EU Taxonomy Regulation). The Consoli-
dated ESG data have been prepared in accordance with the stated ac-
counting policies. In our opinion, it gives a fair view of the group's envi-
ronmental, social, and governance performance.
In our opinion, the Annual Report of GN Store Nord A/S for the finan-
cial year January 1 to December 31, 2023 with the file name GNStore-
Nord-2023-12-31.zip is prepared, in all material respects, in compliance
with the ESEF Regulation.
We recommend that the annual report be approved at the Annual Gen-
eral Meeting.
Statements by the Executive Management
and the Board of Directors
Ballerup, February 8, 2024
Executive Management
Peter Karlstromer
Group
CEO
Søren Jelert
Group
CFO
Board of Directors
Jukka Pekka Pertola
Chair
Klaus Holse
Deputy
Chair
Hélène Barnekow
Anette Weber
Leo Larsen
Cathrin Inge Hansen
Claus Holmbeck-Madsen
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GN Store Nord
Annual Report 2023
Content
To the shareholders of GN Store Nord A/S
Report on the audit of the Financial Statements
Our opinion
In our opinion, the Consolidated Financial Statements and the Parent
Company Financial Statements give a true and fair view of the Group’s
and the Parent Company’s financial position at 31 December 2023 and
of the results of the Group’s and the Parent Company’s operations and
cash flows for the financial year 1 January to 31 December 2023 in ac-
cordance with IFRS Accounting Standards as adopted by the EU and
further requirements in the Danish Financial Statements Act.
Our opinion is consistent with our Auditor’s Long-form Report to the
Audit Committee and the Board of Directors.
What we have audited
The Consolidated Financial Statements and Parent Company Financial
Statements of GN Store Nord A/S for the financial year 1 January to 31
December 2023, pp 74-148 comprise income statement and statement
of comprehensive income, balance sheet, statement of changes in eq-
uity, statement of cash flows and notes, including material accounting
policy information for the Group as well as for the Parent Company.
Collectively referred to as the "Financial Statements".
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (ISAs) and the additional requirements applicable in Denmark.
Our responsibilities under those standards and requirements are fur-
ther described in the Auditor’s responsibilities for the audit of the Fi-
nancial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International
Ethics Standards Board for Accountants’ International Code of Ethics
for Professional Accountants (IESBA Code) and the additional ethical
requirements applicable in Denmark. We have also fulfilled our other
ethical responsibilities in accordance with these requirements and the
IESBA Code.
To the best of our knowledge and belief, prohibited non-audit services
referred to in Article 5(1) of Regulation (EU) No 537/2014 were not
provided.
Appointment
We were first appointed auditors of GN Store Nord A/S on 21 March
2019 for the financial year 2019. We have been reappointed annually
by shareholder resolution for a total period of uninterrupted engage-
ment of five years including the financial year 2023.
Independent Auditor’s Reports
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Annual Report 2023
Content
Key audit matters
Key audit matters are those matters that, in our professional judg-
ment, were of most significance in our audit of the Financial State-
ments for 2023. These matters were addressed in the context of our
audit of the Financial Statements as a whole, and in forming our opin-
ion thereon, and we do not provide a separate opinion on these mat-
ters.
Key audit matter
How our audit addressed the key audit matter
Capitalisation and valuation of development costs
The Group capitalises development costs within both the hearing and audio segment when
certain criteria according to IFRS Accounting Standards are met.
The criterias for recognition and measurement of development costs are subject to Man-
agement’s estimates and judgments, which are uncertain by nature.
Completed development projects are assessed for impairment indications during the year.
For in
-progress development projects impairment tests are performed at least yearly. The
impairment tests are based on a strategy plan approved by Management and value
-in-use
calculations based on expected future cash flows.
We focused on this area because the criterias for recognition and measurement of develop-
ment projects are subject to Management estimates and judgments.
Refer to note 3.1 in the Financial Statements.
We assessed whether the Group’s material accounting policies related to capitalisation and
valuation of development costs are in accordance with IFRS Accounting Standards.
We updated our understanding of relevant controls, including Group controlling proce-
dures, IT systems and business processes regarding development costs. For the controls,
we assessed whether they were designed and implemented to effectively address the ri
sk
to material information. For selected controls which we planned to rely upon, we tested the
operating effectiveness.
We selected a sample of in
-progress development projects and considered whether all cri-
terias described in IFRS Accounting Standards were met as a basis for capitalisation. We
performed substantive audit procedures to verify capitalised amounts.
We evaluated and challenged Management’s assessment of impairment indicators of com-
pleted development projects based on the commercial prospects of the projects.
For in
-progress development projects and completed projects where there are indications
of impairment, we challenged the significant assumptions applied in the value
-in-use calcu-
lations. Our work was based on our understanding of the business cases and key
assump-
tions applied. We challenged whether the intend to finalise the projects remain and
whether the projects are expected to generate future economic benefits exceeding the car-
rying values.
We assessed the
completeness and accuracy of the disclosures of development projects
and related impairment tests against the disclosure requirements in IAS 36 and IAS 38.
153/157
GN Store Nord
Annual Report 2023
Content
Statement on Management’s Report
Management is responsible for Management’s Report, pp 1-72.
Our opinion on the Financial Statements does not cover Management’s
Report, and we do not express any form of assurance conclusion
thereon.
In connection with our audit of the Financial Statements, our responsi-
bility is to read Management’s Report and, in doing so, consider
whether Management’s Report is materially inconsistent with the Fi-
nancial Statements or our knowledge obtained in the audit, or other-
wise appears to be materially misstated.
Moreover, we considered whether Management’s Report includes the
disclosures required by the Danish Financial Statements Act and Arti-
cle 8 of Regulation (EU) 2020/852 (EU Taxonomy Regulation).
Based on the work we have performed, in our view, Management’s Re-
port is in accordance with the Consolidated Financial Statements and
the Parent Company Financial Statements and has been prepared in
accordance with the requirements of the Danish Financial Statements
Act and the disclosure requirements of Article 8 of Regulation (EU)
2020/852 (EU Taxonomy Regulation). We did not identify any material
misstatement in Management’s Report.
Management’s responsibilities for the Financial Statements
Management is responsible for the preparation of consolidated finan-
cial statements and parent company financial statements that give a
true and fair view in accordance with IFRS Accounting Standards as
adopted by the EU and further requirements in the Danish Financial
Statements Act, and for such internal control as Management deter-
mines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or
error.
In preparing the Financial Statements, Management is responsible for
assessing the Group’s and the Parent Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless Man-
agement either intends to liquidate the Group or the Parent Company
or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
Financial Statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that in-
cludes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs
and the additional requirements applicable in Denmark will always de-
tect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the eco-
nomic decisions of users taken on the basis of these Financial State-
ments.
As part of an audit in accordance with ISAs and the additional require-
ments applicable in Denmark, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Finan-
cial Statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evi-
dence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresenta-
tions, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circum-
stances, but not for the purpose of expressing an opinion on the ef-
fectiveness of the Group’s and the Parent Company’s internal con-
trol.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by Management.
• Conclude on the appropriateness of Management’s use of the going
concern basis of accounting and based on the audit evidence ob-
tained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s and the
Parent Company’s ability to continue as a going concern. If we con-
clude that a material uncertainty exists, we are required to draw at-
tention in our auditor’s report to the related disclosures in the Fi-
nancial Statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence ob-
tained up to the date of our auditor’s report. However, future
events or conditions may cause the Group or the Parent Company
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Fi-
nancial Statements, including the disclosures, and whether the Fi-
nancial Statements represent the underlying transactions and
events in a manner that gives a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the Group to
express an opinion on the Consolidated Financial Statements. We
are responsible for the direction, supervision and performance of
the group audit. We remain solely responsible for our audit opinion.
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Annual Report 2023
Content
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide those charged with governance with a statement that
we have complied with relevant ethical requirements regarding inde-
pendence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence
and, where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit
of the Financial Statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter.
Report on compliance with the ESEF Regulation
As part of our audit of the Financial Statements we performed proce-
dures to express an opinion on whether the annual report of GN Store
Nord A/S for the financial year 1 January to 31 December 2023 with
the filename GNStoreNord-2023-12-31.zip is prepared, in all material
respects, in compliance with the Commission Delegated Regulation
(EU) 2019/815 on the European Single Electronic Format (ESEF Regu-
lation) which includes requirements related to the preparation of the
annual report in XHTML format and iXBRL tagging of the Consolidated
Financial Statements including notes.
Management is responsible for preparing an annual report that com-
plies with the ESEF Regulation. This responsibility includes:
• The preparing of the annual report in XHTML format;
• The selection and application of appropriate iXBRL tags, including
extensions to the ESEF taxonomy and the anchoring thereof to ele-
ments in the taxonomy, for all financial information required to be
tagged using judgment where necessary;
• Ensuring consistency between iXBRL tagged data and the Consoli-
dated Financial Statements presented in human-readable format;
and
• For such internal control as Management determines necessary to
enable the preparation of an annual report that is compliant with
the ESEF Regulation.
Our responsibility is to obtain reasonable assurance on whether the an-
nual report is prepared, in all material respects, in compliance with the
ESEF Regulation based on the evidence we have obtained, and to issue
a report that includes our opinion. The nature, timing and extent of
procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material departures from the requirements
set out in the ESEF Regulation, whether due to fraud or error. The pro-
cedures include:
• Testing whether the annual report is prepared in XHTML format;
• Obtaining an understanding of the company’s iXBRL tagging pro-
cess and of internal control over the tagging process;
• Evaluating the completeness of the iXBRL tagging of the Consoli-
dated Financial Statements including notes;
• Evaluating the appropriateness of the company’s use of iXBRL ele-
ments selected from the ESEF taxonomy and the creation of exten-
sion elements where no suitable element in the ESEF taxonomy has
been identified;
• Evaluating the use of anchoring of extension elements to elements
in the ESEF taxonomy; and
• Reconciling the iXBRL tagged data with the audited Consolidated
Financial Statements.
In our opinion, the annual report of GN Store Nord A/S for the financial
year 1 January to 31 December 2023 with the file name GNStoreNord-
2023-12-31.zip is prepared, in all material respects, in compliance with
the ESEF Regulation.
Hellerup, 8 February 202 4
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no 3377 1231
Mads Melgaard
State Authorised Public Accountant
mne34354
Søren Ørjan Jensen
State Authorised Public Accountant
mne33226
155/157
GN Store Nord
Annual Report 2023
Content
To the stakeholders of GN Store Nord A/S
GN Store Nord A/S engaged us to provide limited assurance on GHG
emissions in Scope 1 and GHG emissions in Scope 2 presented on page
55 and percentage of Women in Senior Management presented on
page 57 in the 2023 annual report of GN Store Nord A/S for the period
1 January – 31 December 2023 (the "Selected ESG data").
Our conclusion
Based on the procedures we performed and the evidence we obtained,
nothing came to our attention that causes us not to believe that the
Selected ESG data for the period 1 January - 31 December 2023 pre-
sented in the 2023 annual report of GN Store Nord A/S are prepared, in
all material respects, in accordance with the applied accounting poli-
cies developed by GN Store Nord A/S as stated on pages 56 and 58 the
“accounting policies”.
This conclusion is to be read in the context of what we state in the re-
mainder of our report.
What we are assuring
The scope of our work was limited to assurance over the Selected ESG
data included in the ESG sections of the annual report for 2023 for the
period 1 January – 31 December 2023:
• GHG emissions in Scope 1 and 2, location and market based, as
stated on page 55;
• Women in Senior Management as stated on page 57.
We have not provided any assurance on any other ESG data in the
2023 annual report. We express limited assurance in our conclusion.
Professional standards applied and level of assurance
We performed a limited assurance engagement in accordance with In-
ternational Standard on Assurance Engagements 3000 (Revised) ‘As-
surance Engagements other than Audits and Reviews of Historical Fi-
nancial Information’ and, in respect of the greenhouse gas emissions, in
accordance with International Standard on Assurance Engagements
3410 ‘Assurance engagements on greenhouse gas statements’. The
quantification of greenhouse gas emissions is subject to inherent un-
certainty because of incomplete scientific knowledge used to deter-
mine the emissions factors and the values needed to combine emis-
sions of different gasses.
A limited assurance engagement is substantially less in scope than a
reasonable assurance engagement in relation to both the risk assess-
ment procedures, including an understanding of internal control, and
the procedures performed in response to the assessed risks; conse-
quently, the level of assurance obtained in a limited assurance engage-
ment is substantially lower than the assurance that would have been
obtained had a reasonable assurance engagement been performed.
Our independence and quality control
We have complied with the independence requirements and other ethi-
cal requirements in the International Ethics Standards Board for Ac-
countants’ International Code of Ethics for Professional Accountants
(IESBA Code), which is founded on fundamental principles of integrity,
objectivity, professional competence and due care, confidentiality and
professional behavior, and ethical requirements applicable in Denmark.
PricewaterhouseCoopers applies International Standard on Quality
Management 1, ISQM 1, which requires the firm to design, implement
and operate a system of quality management including policies or pro-
cedures regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.
Our work was carried out by an independent multidisciplinary team
with experience in sustainability reporting and assurance.
Understanding reporting and measurement methodologies
The Selected ESG data need to be read and understood together with
the accounting policies. The accounting policies used for the prepara-
tion of the Selected ESG data are the applied accounting policies devel-
oped by GN Store Nord A/S, which Management is solely responsible
for selecting and applying.
The absence of a significant body of established practice on which to
draw to evaluate and measure ESG data allows for different, but ac-
ceptable, measurement techniques and can affect comparability be-
tween entities over time.
Work performed
We are required to plan and perform our work in order to consider the
risk of material misstatement of the Selected ESG data. In doing so and
based on our professional judgement, we:
• Evaluated the appropriateness of the accounting policies used,
their consistent application and related disclosures
Independent limited assurance report
on
selected ESG data
156/157
GN Store Nord
Annual Report 2023
Content
• Made inquiries and conducted interviews with Group functions to
assess consolidation processes, use of company-wide systems, and
controls performed at Group level;
• Checked the Selected ESG data on a sample basis to underlying
documentation and evaluated the appropriateness of quantifica-
tion methods and compliance with the accounting policies for pre-
paring the Selected ESG data;
• Performed analytical review and trend explanation of the Sustaina-
bility Information;
• Considered the disclosure and presentation of the Selected ESG
data; and
• Evaluated the obtained evidence.
Management’s responsibilities
Management of GN Store Nord A/S is responsible for:
• Designing, implementing and maintaining internal control over in-
formation relevant to the preparation of the Selected ESG data in
the annual report that are free from material misstatement,
whether due to fraud or error;
• Establishing objective accounting policies for preparing the Se-
lected ESG data;
• Measuring and reporting the information in the Selected ESG data
based on the accounting policies; and
• The content of the annual report.
Our responsibility
We are responsible for:
• Planning and performing the engagement to obtain limited assur-
ance about whether the Selected ESG data for the period 1 January
– 31 December 2023 are prepared, in all material respects, in ac-
cordance with the accounting policies;
• Forming an independent conclusion, based on the procedures per-
formed and the evidence obtained; and
• Reporting our conclusion to the stakeholders of GN Store Nord A/S.
Hellerup, 8 February 2024
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no 3377 1231
Mads Melgaard
State Authorised Public Accountant
mne34354
Søren Ørjan Jensen
State Authorised Public Accountant
mne33226
157/157
GN Store Nord
Annual Report 2023
Content
GN Store Nord A/S
Lautrupbjerg 7
2750 Ballerup
Denmark
+45 45 75 00 00
info@gn.com
gn.com
Co.reg. no 2 42578 43
© 202
4 GN Store Nord A/S. All rights reserved. Beltone, BlueParrott, Danavox, FalCom,
Interton, Jabra, ReSound and SteelSeries are trademarks of
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