Q4: GN Store Nord slår forventningerne men fremstår dyr

Af Andreea Hotaranu, Aktieanalytiker hos Morningstar.

Narrow-moat GN Store Nord reported full-year revenue of DKK 10.6 billion, or 11% growth year over year, with a 1% acquisition contribution offset by a 3% currency decline. The 13% full-year organic growth was mainly driven by GN Audio at 21% organic growth, above our expectations, while GN Hearing delivered 7% organic growth, fueled by an impressive 10% in the last quarter. The shares reacted positively to the results, but for now, we are maintaining our DKK 250 fair value estimate and narrow moat rating.

All main regions contributed to GN Hearing sales growth. North America recorded double-digit organic growth in the competitively advantaged independent channel. The important Veterans Affairs channel and Beltone, GN's own U.S retail, reported growth below the overall group. GN Hearing also recorded strong growth in Europe, highlighting France, and double digits in the rest of the world, with China and India as the main contributors. The new ReSound LiNX Quattro played its part in the quarterly solid results, with a strong average selling price increase. However, technological ramp-up costs caused the lack of gross margin improvement year on year.

In the audio business, strong double-digit organic growth was mainly driven by the call center and office and consumer segments. Geographically, CC&O growth was attributable to all regions. GN Audio announced this month the acquisition of Altia Systems, a U.S.-based firm. Altia provides plug-and-play multimedia solutions for unified communications in small and midsize corporate rooms; the rationale for the acquisition is market expansion of GN's unified communications offering.

Group EBITA reached almost DKK 2 billion, a 12% increase compared with last year, while EBITA margin at 18.4% was mainly in line with 2017's level at 18.2%. Earnings per share at DKK 9.25, a 15% increase from last year, came in below consensus and our expectation.

Bulls

• Vi regner med, at udbredelsen af høreapparater vil stige som følge af den voksende middelklasse på emerging markets samt mere tech-kyndige og sundhedsbevidste forbrugere i den vestlige verden.
• Truslen fra store detailforretninger og konsolidering får de uafhængige forhandlere til at favorisere høreapparater, der ikke kommer fra de detail-ejende producenter. Dette skifte vil forbedre GN Hearings position i premium markedssegmentet.
• Emerging markets repræsenterer en robust mulighed for GN, givet den voksende middelklasse og den nuværende lave udbredelse af høreapparater.

Bears

• GN's indgang på emerging markets vil ikke nødvendigvis være sund for selskabets rentabilitet, hvis salgsvolumenerne ikke er store nok til at overkomme de betydelige kapitalinvesteringer (tilstedeværelsen i detailledet skal overkomme markedets manglende brug af høreapparater).
• Den ventede kombination af Sivantos og Widex vil resultere i et langt bedre positioneret selskabet med skala og produktporteføljen til at konkurrere effektivt med de største spillere. Ud fra denne kombination er GN's position den mest udsatte.
• GN Audios tocifrede vækst i Unified Communication-egnede headsets vil aftage i takt med at nye konkurrenter træder ind på det kapital-lette forretningsområde.

Alle estimater og vurderinger er pr. 28. februar 2019 af Andreea Hotaranu, Aktieanalytiker hos Morningstar.

Andreea Hotaranu har ingen positioner i de nævnte værdipapirer. 

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