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Research Tree provides access to ongoing research coverage, media content and regulatory news on GN STORE NORD A S. We currently have 2 research reports from 1 professional analysts.
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GN STORE NORD A S
GN STORE NORD A S
Decent quarter but short-term challenges ahead
01 Dec 16
GN Store Nord reported a healthy quarter with revenue rising 13% to DKK2.1bn, driven predominantly by M&A (c.5ppt mainly Audigy) and forex tailwinds (c.2ppt), while organically the growth receded (6% vs. 9% both in Q2 16 and Q3 15). GN Hearing’s 5% growth (organic, excluding Otometrics), reflected a slowdown sequentially (Q1 16: 11% and Q2 16: 10%) but GN Audio sustained its strong momentum (+9% organically) supported by the sturdy uptake (24%) in Contact Centre & Offices (CC&O) offsetting a sharp decline of 21% in its mobile business. Additionally, it has divested Otometrics (the diagnostic equipment business reported under the GN Hearing segment) to Natus Medical for $145m, and acquired VXi, a US-based headset manufacturer, for $35m, intended to strengthen the GN Audio’s North American presence. With FY 15 sales of DKK649m (c.8% of the group turnover), the GN Otometrics deal translates into 1.5x EV/Sales vs 1.9x as per our NAV. Factoring in these recent transactions, management now guides for an EBITA of c.DKK1,100m for GN Hearing (previously c.DKK1,200m) excluding transaction costs. Also, management expects a much lower effective tax rate of c.22% from the earlier 25-26% for FY 16. The rest of the guidance remains unchanged – GN Hearing: c.6% organic growth; GN Audio: c.7-10% organic growth & c.DKK590m EBITA. Separately, at its Capital Markets Day (CMD) held in September 2016, GN shared its new medium-term targets for 2017-19: a) GN Hearing: annual organic revenue growth of 6-8% and EBITA margin of 20-22%; b) GN Audio – annual organic revenue growth of 6-9% and EBITA margin of 17-19%; and c) effective tax rate of c.22%, in line with the lowered Danish taxes. The key focus in the hearing business will be on increasing its share in the open market (comprising independent dispensers, ENTs and buying groups), while further fortifying its relationship with large retailers (Costco, Veteran Affairs and Amplifon) and the successful launch of its fifth generation 2.4GHz-based product in 2017. The company is also looking to further secure its position in North America, particularly the US (aiming to be number 1), through sales-force expansion, leveraging Audigy’s network and strengthening the Beltone network in the US. On the other hand, GN Audio’s focus will be on improving its presence in the call-centric space, gaining further ground in the Unified Communications (UC) domain and repositioning itself in the mobile segment (geared more towards integrated voice and music solutions).
Initiating coverage on GN Store Nord
23 Aug 16
We are initiating coverage on GN Store Nord (market cap. of DKK21.9bn/ €2.9bn and a float of 100%) with an Add recommendation and a target price of DKK165 (c.17% upside). Our upside is driven by the company’s traditional technological superiority over peers, strong control on costs (through low-cost manufacturing centres such as China and Malaysia), a healthy balance sheet and attractive shareholder reward programmes (through significant share buy-backs and dividends). The stock had come under pressure recently following concerning read-across from its Netcom/ Audio business, weaker profitability and increasing threats from recent product/ platform launches by hearing-aids peers, but has since recovered to come close to its 52-week high. While we acknowledge the upside potential, we restrict our recommendation to an ‘add’, as we continue to see the company facing headwinds in its Netcom business and expect it to under-deliver on its FY 16 profitability guidance, given tougher comps in H2 16 (we see H2 margin expectations as demanding given the H1 run-rate), a changing product mix (from premium towards medium and lower cost products) and limited visibility on a new platform launch this year (given competitors’ recent launches and the US Veteran Affairs contract up for renewal in November, GN may end of conceding some of its market share gains in the past few months – GN currently accounts for a c.20% share of the VA market).
20 Apr 17
Although the last two months have seen a broadly neutral performance from the UK healthcare sector compared to a significantly more volatile 6 months prior, we continue to expect macro-events and increased geo-political risk to result in an overall neutral performance from the sector over the next period. However, company specific news is likely to drive a strong outperformance from selected mid-market companies. We retain our neutral sector stance whilst highlighting those we expect to outperform.
N+1 Singer - Morning Song 24-04-2017
24 Apr 17
First Derivatives (FDP LN) FY slightly ahead as strong trading momentum continues | Goals Soccer Centres (GOAL LN) A potentially exciting corporate development | mporium Group (MPM LN) 2016 results: course set for exciting 2017 | Vectura Group (VEC LN) VR315 risk outweighs longer-term potential
Positive top-line results in first iclaprim phase III clinical trial (REVIVE-1)
18 Apr 17
Motif Bio (LSE: MTFB, NASDAQ: MTFB), a late clinical stage antibiotic development company, announced positive results this morning in the first of its two iclaprim phase III clinical trials, REVIVE-1, comparing iclaprim to vancomycin in the treatment of acute bacterial skin and skin structure infections (ABSSSI). Iclaprim, a next-generation antibiotic targeting an underutilised mechanism of action which causes rapid killing of bacteria, is being developed for the treatment of serious and life threatening bacterial infections. On the key primary endpoint in the study, early clinical response at 48-72 hours after drug treatment began, 80.9% of patients on iclaprim achieved a positive response compared to 81.0% of patients on vancomycin, well within the 10% non-inferiority margin required by the FDA. Iclaprim was also shown to be safe and well-tolerated compared to vancomycin. With these positive results from REVIVE-1 we have increased the probability of success for the iclaprim development program from 65% to 75% raising our risk-adjusted NPV for Motif Bio to almost £240m or 122p per share (previously £210m and 107p per share).
N+1 Singer - Sinclair Pharma - EBITDA upgrade for 2017, but lower TP due to warranty claim and costs
19 Apr 17
We have updated product-level forecasts and included the £10m SVB debt facility and £5m warranty claim settlement with Alliance Pharma in our forecasts. The 6.3% upgrade to our FY2017 sales estimate (from £46.0m to £48.9m) brings expected EBITDA profitability forward by one year (to FY2017 from FY2018). We remain positive on the ongoing rollout of Silhouette Instalift® in particular and retain our Buy recommendation. However, higher expected sales & marketing costs and the warranty claim weigh on our valuation: we downgrade our target price from 42p to 37p.
24 Apr 17
Lok’nStore* (LOK): Growth supported by a strong balance sheet (CORP) | Mortice* (MORT): UK acquisition (CORP) | Avacta* (AVCT): Another milestone – 1st non-therapeutics licence (CORP) | Petra Diamonds (PDF): Trading update and Q3 results (BUY) | Nasstar* (NASA): Growth and margin focus (CORP)