GN Audio A/S
Annual Report 2023
Approved at the annual general meeting 26 / 04 / 2024
Chairman:
…..…………….………………………..
CVR-no. 15 06 95 11
GN Audio A/S, Lautrupbjerg 7, 2750 Ballerup
Contents
Statements
Statement by the Executive Management
and the Board of Directors 3
Independent auditors’ report 4
Management’s report
Company Details 6
Financial highlights 7
Management review of GN Audio A/S 8
Key ratio definitions 12
Financial Statements
Income statement and statement of
comprehensive income 13
Balance sheet 14
Statement of cashflow 15
Statement of equity 16
Notes to the financial statements
Section 4 Financing Items
4.1 Financial risks 35
4.2 Financial income and expenses 36
4.3 Financial instruments 37
Section 5 Other disclosures
5.1 Share-based incentive plans 39
5.2 Contingent assets and liabilities 42
5.3 Other non-cash adjustments 42
5.4 Fees to statutory auditors 42
5.5 Related parties 43
Companies in GN Audio Group 44
Section 1 Basis of Preparation
1.1 General accounting policies 17
1.2 Significant accounting estimates and judgments 19
1.3 Non-IFRS measures 19
Section 2 Results for the year
2.1 Revenue and geographical information 20
2.2 Staff Costs 20
2.3 Tax 23
2.4 Income statement classified by function 24
Section 3 Operating assets and liabilities
3.1 Intangible assets 25
3.2 Property, plant and equipment 27
3.3 Leases 28
3.4 Depreciation, amortization and impairment 30
3.5 Inventories 31
3.6 Provisions 32
3.7 Trade receivables 32
3.8 Investment in subsidiaries 32
3 Financial statements – Statement by the Executive Management and the Board of Directors
Contents
GN Audio A/S Annual Report 2023
Statement by the Executive
Management and the Board of
Directors
Executive management
Board of directors
Mikkel Salling Steen Bay Smidt
4 Management’s report – Independent Auditor’s Report
Contents
GN Audio A/S Annual Report 2023
Independent Auditor’s Report
5 Management’s report – Independent Auditor’s Report
Contents
GN Audio A/S Annual Report 2023
CVR No 33 77 12 31
mne34354 mne33226
6 Management’s report - Company details
Contents
GN Audio A/S Annual Report 2023
Management’s report
Company details
Company GN Audio A/S
Phone: 45 75 88 88
E-mail: info@gn.com
Webpage: www.gn.com
CVR.no.: 15 06 95 11
Started: 30 August 1967
Location: Ballerup
Accounting year: 1 January – 31 December
Board of Directors Peter Karlstromer (Chairman)
Søren Jelert (Deputy Chairman)
Anders Kjærsgaard Dybro
Mikkel Salling (Employee elected)
Steen Bay Smidt (Employee elected)
Executive management Søren Jelert, CEO
Auditors PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
Strandvejen 44
2900 Hellerup
Ownership The company is 100% owned by GN Store Nord A/S
Lautrupbjerg 7
2750 Ballerup, Denmark
7 Management’s report – Financial highlights
Contents
GN Audio A/S Annual Report 2023
Financial highlights
DKK thousand 2023 2022 2021 2020 2019
Revenue 10,202,107 8,700,686 8,582,494 7,198,755 4,900,805
Gross Profit 2,356,641 2,817,087 3,331,764 2,908,823 1,900,201
EBITA * -360,679 1,015,164 1,692,301 1,577,253 913,822
Operating profit (loss) -447,812 929,849 1,607,393 1,492,607 871,092
Result from financial items 688,777 128,011 51,684 1,083,108 140,710
Profit (loss) for the year 222,720 902,699 1,322,653 2,259,008 804,648
Non-current assets 11,172,287 10,246,814 2,812,433 2,410,228 2,389,259
Current assets 2,146,553 2,156,532 4,424,787 3,355,555 1,409,615
Total assets 13,318,840 12,403,346 7,237,220 5,765,783 3,798,874
Share capital 35,252 35,172 35,109 34,874 34,545
Total equity 10,771,178 4,864,457 4,969,043 3,504,355 2,111,896
Non-current liabilities 260,083 270,272 259,020 244,979 219,980
Current liabilities 2,287,579 7,269,017 2,009,157 2,016,449 1,466,998
Cash flow from operating activities 2,216,432 1,424,479 1,760,909 1,787,021 1,378,194
Investment in tangible assets 14,342 89,608 142,601 111,805 102,688
Key ratios in percent
Operating Margin -4.4 10.7 18.7 20.7 17.8
Gross Margin 23.1 32.4 38.8 40.4 38.8
Return on Invested Capital -12.3 19.5 31.1 42.2 32.9
Equity Ratio 80.9 39.2 68.7 60.8 55.6
Return on Equity 2.8 21.6 31.2 80.4 37.2
*) Please refer to Key Ratio Definitions on page 12
8 Management’s report – Management’s review
Contents
GN Audio A/S Annual Report 2023
Management’s review of
GN Audio A/S
New Management setup and new segment’s structure
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 divisions 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 Peter Karlströmer
and the CFO Søren Jelert 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.
Principal activities of the Company
GN Audio is developing cutting-edge headsets, speakerphones, and video solutions. The product brands include Jabra, SteelSeries, Falcom and Blue
Parrott. GN’s audio and video products are sold via distributors and retailers in around 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.
GN’s audio and video products are mainly produced by carefully selected manufacturers in China and Southeast Asia, and most components are
sourced from suppliers in Asia. GN Audio works with a small number of tier-one manufacturers supported by more than 100 suppliers.
In January 2022, all regulatory approvals in relation to the acquisition of SteelSeries were finalized, and the deal was closed. SteelSeries oers premi-
um software-enabled and system-integrated gaming gear.
Development in activities and financial matters
The revenue in 2023 reached DKK 10,202 million, compared to DKK 8,700 million in 2022, corresponding to an increase of 14.7%.
In the Enterprise business, GN executed solidly in challenging market conditions and against a high comparison base, while defending its global mar-
ket 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.
GN Audio’s profit for 2023 has been impacted by the impairment of certain inhouse development projects. Operating profit was also impacted by a
696 million loss on the sale of Shares in Audio US.
GN Audio’s EBITA ended at DKK -361 million in 2023 compared to DKK 1,015 million in 2022. The EBITA margin ended at -4.4%
GN Audio took important actions to restructure the Consumer business by narrowing the product portfolio to set the business up for growth and
profitability. An important lever in the execution was related to the launch of one midrange and two new premium true wireless earbuds, Jabra Elite
4, Jabra Elite 8 Active and Jabra Elite 10.
The Company has received a letter of support from GN Store Nord A/S. We refer to note 5.5 for further information.
Events after the balance sheet date
The merger of SteelSeries Aps into GN Audio A/S toke place 1st of March 2024. There are sound commercial reasons for the Contemplated Merger
such as substantial synergies in several areas and material cost savings, which can only be derived fully through a merger. Thus, the purpose of the
Contemplated Merger is to optimize both companies’ operations by combining and integrating functions and systems and strengthening their bar-
9 Management’s report – Management’s review
Contents
GN Audio A/S Annual Report 2023
gaining position towards contracting parties. In addition to that it also contributes to the new strategy OneGN.
Financial guidance 2024
The financial guidance is prepared at segment level at GN Store Nord.
In Enterprise division following some very dicult years in the broader Enterprise equipment market, 2023 saw some general volume stabilization.
Supported by early signs of a healthier PC market at the end of 2023 and an expected increase in broader IT equipment spend during 2024, GN
projects 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 product portfolio and to win market share in
Enterprise video due to our industry-leading oering, channel access strength, and strong partnerships with leading software vendors. Consequent-
ly, the Enterprise division assumes to contribute with organic revenue growth of -3% to 5%. Regarding Gaming & Consumer division the broader
Consumer market experienced general stabilization during 2023, following a very dicult 2022. Despite the current macro-economic headwinds and
related impact on consumer sentiment, GN projects 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 innovation leadership. Consequently, the Gaming & Consumer division assumes to contribute with
organic revenue growth of 2% to 10%.
Risk management
GN aligns its enterprise risk management eorts with the ISO 31000 standard for risk management. The company views this as a valuable approach
to protecting shareholder value. It also helps validate investment decisions.
The Group Risk and Compliance department facilitates the recurring risk management process. It covers all businesses and value chains, and all rele-
vant executives and functional specialists participate. Moreover, the assessment and monitoring of climate-related risks is integrated in the recurring
risk management process to enable proactive mitigation of any potential impact.
The risk reviews assess current and emerging risks from a risk catalogue of 200+ risks. The management teams of the respective businesses prioritize
the risks to a number of top risks for each business and assign formal risk owners to each top risk. The risk owner is also responsible for the mitigation
of the risk.
The Executive Management reviews the top business risks and presents a consolidated Top 10 to the Board of Directors for review.
The main types of risk associated with GN’s businesses, and the main risk mitigation taken to manage them are outlined on the following pages.
Research and development
Characteristics
Some product categories which GN Audio serves have short product cycles and experience commoditization of technological capabilities, increased
software content in products, and a requirement to provide substantial dierences in end-user experiences to maintain competitiveness. Additionally,
GN Audio needs to develop new categories for the future.
It is necessary for GN to maintain their technological leadership in key categories to strengthen GN’s long-term strategic potential.
Mitigating actions
GN’s unwavering commitment to innovation excellence continued in 2023. It aligns current and future customer needs, innovation, portfolio plan-
ning and core technology. It also helps maximize the output from available R&D resources without compromising on high-quality standards.
GN increasingly explores and leverages its technological synergies between GN Audio and GN Hearing, expands its R&D capabilities, and invests in
additional software development capabilities. Further, it continuously explores opportunities to acquire competencies and deepen innovation part-
nerships within its ecosystem.
Operations
Characteristics
GN’s supply chains, including component sourcing, remain heavily dependent on availability of components and manufacturing capacity in China and
Asia. Escalating local and geopolitical instability and deteriorating trade relations may impact key suppliers and GN’s operations. Additionally, GN
depends on global free trade regimes for the optimal application of its value chains.
10 Management’s report – Management’s review
Contents
GN Audio A/S Annual Report 2023
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 eorts in line with the industry in general.
Marketing and sales
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. This may result in declining demand for GN’s products, or temporarily
lower than expected growth.
GN Audio saw significant growth from work-from-home solutions during COVID-19 and the subsequent expansion of hybrid working patterns pro-
vides robust future momentum in GN Audio’s main markets. In addition to its traditional enterprise headset market, GN Audio decided to pursue the
high-growth market for video collaboration. GN Audio has introduced several compelling devices to capture a robust share of the market.
The shifts in work models seen since 2021 suggest that the market for GN Audio will continue to increase as penetration of virtual collaboration
devices for professional use is still very low. The risk remains whether the substantially higher demand for work-from-home and ecient virtual col-
laboration solutions is sustainable.
Mitigating actions
GN Audio strives to deepen its presence and relevance across B2B and retail channels. Its future product roadmaps assume a high cadence of new
product introductions to support this eort by addressing users’ needs through superior and competitive product portfolios.
Its products also align with ecosystem partners and certification requirements, while the sales organization continuously adapt to new domains and
customer segments. The business has increased its brand awareness building activities across key segments to ensure adequate share of mind with
corporate and private decision-makers in a cluttered market.
GN Audio invests heavily in providing solutions for the new work and collaboration trends and expands into new customer segments to capture more
opportunity and diversify its sources of demand.
The Jabra PanaCast 50 Room System is a big growth opportunity for GN. The shift to hybrid work – which began long before COVID-19 and expand-
ed rapidly during the pandemic – continues to grow for productivity and cost reasons. It has led to an increased demand for video-enabled conference
rooms, but also for better hybrid experiences than most video-enabled conference rooms oered at the onset of the pandemic.
Human resources
Characteristics
GN remains an attractive destination for top-tier engineering and commercial talent. GN is, however, not immune to the general scarcity of key talent
populations within, for example, engineering and software development. GN needs to consciously focus on attracting and retaining top-tier talent
with the competencies and capabilities required in the future.
Lack of talent could result in loss of momentum in innovation and product development, delaying the introduction of compelling products, and ulti-
mately impact the successful execution of GN’s strategic objectives.
Mitigating actions
GN has expanded its recruiting eorts while continuing its eorts to develop an attractive employee value proposition. Human Resources work
closely with the Research and Development departments to understand future competency needs.
Other risks
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 han-
dling of these financial risks in Group Treasury except for commercial risks, which are managed by the Group’s operating businesses (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.
11 Management’s report – Management’s review
Contents
GN Audio A/S Annual Report 2023
Mitigating actions
GN has hedged a substantial part of the expected net cash-flow in foreign currencies to secure the EBITA contribution of the material trading curren-
cies for the next 12 months. GN is also monitoring the combined impact of minor trading currencies and hedges those on a case-by-case basis.
Please refer to note 4.1 in the financial statements for further information about financial risks.
Sustainability - ESG report
GN’s 2023 Sustainability - ESG report (available for download here: www.gn.com) provides a full overview of our progress across across all areas (GN
Store Nord A/S, CVR no. 24257843).
The 2023 Sustainability – ESG report forms part of the 2023 Annual Report for GN Store Nord A/S and, thus, in combination constitutes GN’s corpo-
rate responsibility report according to Sections 99a and 99d in the Danish Financial Statements Act.
Corporate governance
Corporate governance refers to the way a company is managed and controlled through ownership, management structure, incentive schemes, etc.
GN strives to build trusted relationships with customers, shareholders, suppliers, employees, and the community. We also aim for a high degree of
transparency and active ownership, including sharing information and engaging in a regular dialogue with all our stakeholders.
Please consult the annual report for GN Store Nord A/S to find the complete description of the Corporate governance www.gn.com/Investor/Finan-
cial-reports.
On its website GN provides a statutory report on corporate governance, including an explanation of how GN complies with each recommendation
(www.gn.com/CorporateGovernance2022 ). This overview, as well as the risk management and internal control systems related to financial reporting
described in the risk management section in this report, form the statutory report on corporate governance that is required under section 107b of
the Danish Financial Statements Act.
Gender and diversity representation in management
2023 2024 2025 2026 2027
Board of Directors
Board Members 3
Female members (%) 0%
Target (%) 25 %
Target year 2027
Other management
Management team size 19
Female members (%) 21 %
Target (%) 35 %
Target year 2027
12 Financial statements - Key ratio definitions
Contents
GN Audio A/S Annual Report 2023
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, amortization 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, impairment of goodwill and
gains (losses) on divestment of operations etc. EBITA therefore include amortization of development projects and
software developed in-house.
Key Ratio Definitions
Operating Margin = Operating profit (loss) * 100
Revenue
Gross margin = Gross profit(loss) * 100
Revenue
EBITA margin = EBITA
Revenue
Return on invested capital (ROIC) = Operating profit (loss) * 100
Average invested capital
Return on equity (ROE) = Profit (loss) * 100
Average equity
Equity ratio = Total equity
Total assets
Key Ratio Definitions
13 Financial statements – Income statement
Contents
GN Audio A/S Annual Report 2023
Income statement
DKK thousand Note 2023 2022
Revenue 2.1, 2.4 10,202,107 8,700,686
Production costs 2.4 -7,845,466 -5,883,599
Gross profit 2,356,641 2,817,087
Research and Development costs 2.2, 2.4, 3.4 -720,881 -670,108
Selling and distribution costs 2.2, 2.4, 3.4 -725,264 -644,721
Management and administrative expenses 2.2, 2.4, 3.3, 3.4 -535,043 -600,409
Other operating income and costs, net -736,132 113,315
EBITA* -360,679 1,015,164
Amortization of acquired intangible assets 2.2, 2.4, 3.1 -87,133 -85,315
Operating profit (loss) -447,812 929,849
Financial income 4.2 867,713 223,481
Financial expenses 4.2 -178,936 -95,470
Profit (loss) before tax 240,965 1,057,860
Tax on profit (loss) 2.3 -18,245 -155,161
Profit (loss) for the year 222,720 902,699
Proposed profit appropriation/distribution of loss
Retained earnings 147,325 717,762
Transfer to reserve for capitalized development projects 75,395 184,937
Profit (loss) for the year 222,720 902,699
2
Statement of comprehensive income
* Please refer to Key Ratio Definitions on page 12
DKK thousand Note 2023 2022
Profit (loss) for the year 222,720 902,699
Items that may be reclassified subsequently to the income statement
Adjustment of cash flow hedges 4.3
-108,079
Foreign exchange adjustments, etc.
Tax relating to these items of other comprehensive income 2
-16,133
Other comprehensive income for the year, net of tax 57,199 -81,160
Total comprehensive income for the year 279,919 821,539
* Excluding amortization of acquired intangible assets but including amortization of development projects and software developed in-
house.
3
14 Financial statements – Balance sheet
Contents
GN Audio A/S Annual Report 2023
Balance sheet at December 31
DKK thousand Note 2023 2022
Assets
Intangible assets 3.1 1,287,349 1,279,179
Property, plant and equipment 3.2 145,810 240,444
Other non-current assets 6,110 6,110
Investments in subsidiaries 3.8 9,725,714 8,721,081
Amounts owed by subsidiaries and group companies 4.1 7,304 0
Total non-current assets 11,172,287 10,246,814
Inventories 3.5 1,014,983 1,294,791
Trade receivables 3.7, 4.1 146,119 285,686
Amounts owed by subsidiaries and group companies, current 4.1 815,958 384,027
Other receivables 4.1 165,698 191,806
Cash and cash equivalents 4.1 3,795 222
Total current assets 2,146,553 2,156,532
Total assets 13,318,840 12,403,346
Equity and Liabilities
Share capital 35,252 35,172
Other reserves -23,367 -80,566
Reserve for capitalized development projects 781,632 706,237
Retained earnings 9,977,661 4,203,614
Total equity 10,771,178 4,864,457
Lease liabilities, non-current 3.3 946 15,780
Provisions, non-current
3.6 61,059 73,062
Deferred tax liabilities 2.3 198,078 181,430
Total non-current liabilities 260,083 270,272
Lease liabilities, current 4.1 15,548 15,822
Trade payables 4.1 1,005,378 707,361
Tax payables 72,314 143,116
Amounts owed to subsidiaries and group companies, current 4.1 340,797 5,240,801
Provisions, current
3.6 15,424 14,241
Other payables 838,118 1,147,676
Total current liabilities 2,287,579 7,269,017
Total equity and liabilities 13,318,840 12,403,346
4
15 Financial statements – Statement of cash flow
Contents
GN Audio A/S Annual Report 2023
Statement of cash flow
DKK thousand Note 2023 2022
Operating activities
Operating profit (loss) -447,812 929,849
Depreciation, amortization and impairment 3.4 618,236 497,872
Other non-cash adjustments 5.3 1,018,534 -170,825
Cash flow from operating activities before changes in working capital 1,188,959 1,256,896
Change in inventories 3.5 279,808 -151,642
Change in receivables 3.7 165,675 -29,782
Change in trade payables and other payables
-11,541 216,440
Total changes in working capital 433,942 35,016
Cash flow from operating activities before financial items and tax 1,622,901 1,291,912
Dividends received 850,685 177,178
Interest paid -168,622 -81,361
Tax paid, net
-88,532 36,751
Cash flow from operating activities 2,216,432 1,424,480
Investing activities
Investments in intangible assets, excluding development projects -524 -15,757
Development projects 3.1 -511,771 -517,211
Investments in property, plant and equipment 3.2 -14,342 -89,608
Amounts owed by subsidiaries, net -439,235 2,445,873
Disposal of intangible assets and property, plant and equipment 4,312 0
Acquisition of companies/operations
3.8 -2,034,853 -7,317,768
Cash flow from investing activities -2,996,413 -5,494,471
Cash flow from operating and investing activities (free cash flow) -779,981 -4,069,991
Financing activities
Lease payments -15,931 0
Paid dividends
Share-based payment (exercised) 1.4 27,266 17,897
Exchange rate adjustments
4.2 7,222 10,268
Amounts owed to subsidiaries 764,996 5,041,444
Cash flow from financing activities 783,553 4,069,609
Net cash flow 3,572 -382
Cash and cash equivalents, beginning of period 223 605
Cash and cash equivalents, end of period
5
16 Financial statements – Statement of equity
Contents
GN Audio A/S Annual Report 2023
Statement of equity
DKK thousand
Share
capital
Hedging
reserve
Reserve for
capitalized
developmen
t projects
Proposed
dividends for
the year
Retained
earnings
Total
equity
2022
Balance at January 1, 2022 35,109 3,736 521,300 1,000,000 3,408,898 4,969,043
Profit (loss) for the period 0 0 184,937 0 717,762 902,699
Adjustment of cash flow hedges 0 -108,079 0 0 3,142 -104,937
Tax relating to other comprehensive
income
Total comprehensive income for the
year
Increase of share capital 63 0 0 0 18,234 18,297
Share-based payment (granted) 0 0 0 0 51,887 51,887
Tax related to share-based incentive
plans
Paid dividends 0 0 0 -1,000,000 0 -1,000,000
Balance at December 31, 2022 35,172 -80,566 706,237 0 4,203,614 4,864,457
Profit (loss) for the period 0 0 75,395 0 147,325 222,720
Adjustment of cash flow hedges 0 73,332 0 0 0 73,332
Tax relating to other comprehensive
income
Total comprehensive income for the year
Increase of share capital 80 0 0 0 27,186 27,266
Share-based payment (granted) 0 0 0 0 -464 -464
Capital increase 0 0 0 0 5,600,000 5,600,000
Balance at December 31, 2023 35,252 -23,367 781,632 0 9,977,661 10,771,178
The share capital has increased by 135 kDKK in 2018, 307 kDKK i 2019, 329 kDKK in 2020, 235 kDKK in 2021, 63 kDKK in 2022, in
2023 by 80 kDKK
6
Accounting policies
Reserve for capitalized development projects
The reserve for development costs comprises GN Audio A/S’s development costs corresponding to the carrying amount of development cost
capitalized in the balance sheet since January 1, 2016 net of tax. The reserve is non distributable and cannot be used to cover deficit. The reserve
is dissolved upon disposal of the development cost either by sale or if the development cost is no longer part of the entity’s operation. The reserve
will then be transferred to the distributable reserves. The reserve will be reduced, and the distributable reserves increased concurrently with either
depreciation or write-downs.
* In 2023, GN Store Nord A/S made a Group subsidy of DKK 5,600 million to support GN Audio A/S
17 Financial statements – Basis of preparation
Contents
GN Audio A/S Annual Report 2023
Section 1
Basis of preparation
In the annual report the notes are grouped in sections. Each note
includes the accounting policies and significant accounting estimates
applicable to the relevant notes. The description of the accounting pol-
icies in the notes is part of the complete description of GN Audio A/S’s
accounting policies. The notes are grouped in these five sections:
Section 1 Basis of preparation
Section 2 Results for the year
Section 3 Operating assets and liabilities
Section 4 Financing items
Section 5 Other disclosures
Included in Section 1 are required disclosures and general accounting
policies, including management’s judgments and estimates under IFRS
Accounting Standards, relevant for the understanding of the basis of
preparation of the financial statements of GN Audio A/S
GN Audio A/S is part of GN Store Nord’s consolidated Annual Report
and pursuant to section 112(1) of the Danish Financial Statements Act,
no consolidated financial statements have been prepared for GN Audio
Group. The financial statements of GN Audio A/S and group entities are
included in the consolidated financial statements of GN Store Nord A/S,
Lautrupbjerg 7, 2750 Ballerup, CVR no. 24257843.
1.1 General accounting policies
The annual report of GN Audio A/S has been prepared in accordance
with IFRS Accounting Standards as adopted by the EU and the Danish
disclosure requirements for annual reports of listed companies.
The financial statements are presented in Danish kroner (DKK), rounded
to the nearest DKK 1,000. The company’s functional currency is DKK.
The annual report has been prepared in accordance with the historical
cost convention, as modified by the revaluation of certain financial in-
struments (including derivative financial instruments) at fair value.
New standards, interpretations and amendments adopted by
GN Audio A/S
As of January 1, 2023, GN Audio A/S adopted all relevant new or revised
International Financial Reporting Standards and IFRIC Interpretations
with eective date January 1, 2023 or earlier. The new or revised stan-
dards and interpretations did not aect 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 eective for annual periods beginning after January 1, 2023
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
Audio A/S.
GN Audio A/S will adopt new standards and interpretations as of the
eective dates.
Revenue
Revenue from the sale of audio and headset 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 Audio A/S 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 typical payment term for customers are 30-60 days.
The amount of revenue recognized varies with discounts and rebates
oered 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 extent that it is highly
probable that a significant reversal will not occur.
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 oset 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 Audio A/S typically provides warranties for general repairs of defects
that existed at the time of sale, as required by law. These assurancetype
warranties are accounted for as described in the accounting policies for
warranty provisions.
18 Financial statements – Basis of preparation
Contents
GN Audio A/S Annual Report 2023
1.1 General accounting policies (Continued)
GN Audio A/S does not expect to have contracts with payment terms
exceeding one year. Consequently, the transaction prices are not ad-
justed for the time value of money. Revenue is measured 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 indirect costs for raw materials and consumables, wages
and salaries, inventory writedowns, 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 operat-
ing assets and equipment directly or indirectly attributable to GN Audio’s
development activities. Furthermore, amortization and writedown of
capitalized development projects are included.
Selling and Distribution Costs
Selling and distribution costs comprise costs relating to the sale and dis-
tribution 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
oce 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.
Foreign Currency Translation
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 dierences 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 denominated
in foreign currencies are translated at the exchange rates at the balance
sheet date. The dierence 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 expenses.
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
eect of acquisitions and disposals of enterprises is shown separately in
cash flows from investing activities. Cash flow from acquired enterprises
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 work-
ing 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 provisions.
Cash flow from investing activities comprises payments in connection
with acquisitions and disposals of enterprises and activities, acquisitions
and disposals of intangible assets, property, plant and equipment and
other non-current assets and acquisitions and disposals of securities 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 interestbearing 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 insig-
nificant risk of changes in value.
Accounting policy for women in senior management posi-
tions
The percentage of female employees holding senior management po-
sitions on December 31, 2023, where senior management is defined as
employees occupying a position at GN level 17.1 or above (equivalent to
a Mercer IPE score 56 or above). The accounting policy has been updat-
ed 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.
19 Financial statements – Basis of preparation
Contents
GN Audio A/S Annual Report 2023
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, deferred tax,
computation of amortization, depreciation and impairment, useful lives
and remaining useful lives of non-current assets.
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 dier from estimates.
A description of significant accounting estimates and judgments is
included in the relevant notes.
1.3 Non-IFRS measures
This Annual Report includes financial measures which are not defined
by IFRS. These measures are included because they are used by GN
Audio A/S’s Management to analyze and manage the business and to
provide stakeholders with useful information on the company’s financial
position, performance and development. Please refer to the Key Ratio
Definitions on page 12 for a definition of the measures.
Note Key accounting estimates and judgements
Estimate/judge-
ment
2.1 Revenue Revenue recognition
Estimate
Judgement
2.3 Tax Measurement of deferred tax Estimate
3.1 Intangible assets Recognition and measurement of development projects
Estimate
Judgement
3.8 Investment in subsidiaries Recognition of investments in Subsidiaries
Estimate
Judgement
20 Financial statements – Results for the year
Contents
GN Audio A/S Annual Report 2023
Section 2
Results for the year
2.1 Revenue and geographical information
DKK thousand 2023 2022
Denmark 3,711,423 853,164
Europe 4,088,807 4,500,475
North America 1,450,991 2,156,413
Asia and rest of world 950,886 1,190,634
Total revenue from customer contracts 10,202,107 8,700,686
Geographical information on assets
DKK thousand 2023 2022
Denmark 1,310,552 1,323,292
Asia and rest of world 122,607 196,331
Total 1,433,159 1,519,623
Revenue
Intangible and PP&E
7
Revenue disaggregation
Revenue is predominantly recognized at a point in time, and revenue recognized over time is not significant. Revenue is attributed to countries on
the basis of the customer’s location. Only the US represents a material single country and constitutes the vast majority of revenue in North America.
Revenue is in all material aspects related to sale of goods; headsets and other audio solutions which primarily are recognized as revenue at a point in
time.
Significant accounting estimates and judgments
Revenue recognition
Certain contracts with customers include a volume rebates that give rise to variable consideration. In estimating the variable consideration GN Audio
A/S 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 the amount of discounts and rebates.
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.
21 Financial statements – Results for the year
Contents
GN Audio A/S Annual Report 2023
2.2 Sta Costs
DKK thousand 2023 2022
Wages, salaries and remuneration
-576,881 -540,138
Pensions, defined contribution plans
-44,019 -48,564
Other social security costs
-2,884 -5,393
Share-based payments
-1,776 -51,887
Total -625,560 -645,982
Included in:
Production costs and change in payroll costs included in inventories
-27,621 -36,826
Development costs
-337,778 -303,485
Selling and distribution costs
-227,756 -185,677
Management and administrative expenses
-32,405 -119,994
Total -625,560 -645,982
Number of employees, year-end 633 678
Full-year remuneration of the Board of Directors 1,350 1,380
8
DKK million
Fixed
salary
Bonus
Share-
based
payment
Total
Fixed
salary
Bonus
Share-
based
payment
Total
Peter Karlstromer, GN Audio 8.3 8.8 1.8 18.9 0.0 0.0 0.0 0.0
René Svendsen-Tune, CEO, GN Audio(retired in 2022
and Peter Karlstromer started 02.01.2023)
9.4 4.6 -8.8 5.2 9.1 3.6 4.3 17.0
Total 17.7 13.4 -7.0 24.1 13.1 4.7 6.5 24.3
Separation agreements expensed in 2022
re. Executive Management
0.0 0.0 0.0 0.0 10.4 7.0 0.0 17.4
Board of Directors remuneration 1.4 0.0 0.0 1.4 1.4 0.0 0.0 1.4
Total 1.4 0.0 0.0 1.4 11.8 7.0 0.0 18.8
Total Executive Management and Board of Directors
remuneration
19.1 13.4 -7.0 25.5 24.9 11.7 6.5 43.1
2023 2022
9
22 Financial statements – Results for the year
Contents
GN Audio A/S Annual Report 2023
Incentive plans
GN Audio’s share-based long-term incentive program is specified and described in note 5.1 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 with a target bonus of 50% of the base salary with a
potential to underperform or outperform the target leading to an eective potential bonus range between 0 - 100% of the base salary. The Executive
Management´s bonus is based on three parameters considering GN’s focus areas:
• René Svendsen-Tune’s bonus is subject to the performance of GN Audio’s EBITA, GN Audio’s revenue and individual performance targets.
• Peter Karlströmer bonus is subject to the performance of GN Audio’s EBITA, GN Audio’s revenue and individual performance targets.
GN Audio does not make pension contributions for members of the Executive Management. Executive Management has usual severance agree-
ments and change-of-control agreements.
23 Financial statements – Results for the year
Contents
GN Audio A/S Annual Report 2023
2.3 Tax
DKK thousand
2023 2022
Tax on profit (loss)
Current tax for the year -13,685 -117,736
Deferred tax for the year -188 -62,175
Withholding tax -7,051 -1,662
Adjustment to current tax with respect to prior years 3,005 8,454
Adjustment to deferred tax with respect to prior years -327 17,958
Total -18,246 -155,161
Reconciliation of effective tax rate
Danish tax rate 22.00% 22.00%
Non-taxable income
-11.62% -3.31%
Non-deductable expenses
0.20% 2.36%
Withholding tax
0.03% 0.00%
Share of profit and loss in associates
0.90% 0.00%
Adjustment of tax with respect to prior years
-1.11% -4.04%
Other, including provisions for uncertain tax positions -5.73% -2.50%
Effective tax rate 7.57% 14.67%
Deferred tax, net
Deferred tax at January 1, net -181,430 -159,742
Adjustment to deferred tax with respect to prior years -327 17,958
Deferred tax for the year recognized in profit (loss) for the year -188 -62,175
Deferred tax related to share-based incentive plans
0 -1,248
Deferred tax for the year recognized in other comprehensive income for the year
-16,133 23,777
Deferred tax at December 31, net -198,078 -181,430
D
D
e
e
f
f
e
e
r
r
r
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e
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,
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l
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s
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t
o
o
:
:
Intangibles -281,847 -278,026
Other securities 124 0
Current assets 20,574 0
Property, plant and equipment 30,519 19,381
Provisions 12,390 11,503
Other 20,163 65,712
Total -198,078 -181,430
10
Deferred tax, net includes DKK 27 million expected to be utilized within 12 months.
Repatriation of retained earnings from certain foreign subsidiaries, however not planned or expected in the foreseeable future, may trigger withhold-
ing tax liabilities up to DKK 17 million (2021: DKK 35 million).
24 Financial statements – Results for the year
Contents
GN Audio A/S Annual Report 2023
2.3 Tax (Continued)
Accounting policies
Tax on Profit (Loss) for the year
GN Audio A/S is jointly taxed with the parent company GN Store Nord A/S and all its Danish subsidiaries. The current Danish corporation tax is
allocated between the jointly taxed companies 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 recognized 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.
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-o
against tax on future income or as a set-o 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 dierences 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. Deferred tax is measured according to the tax rules and at the tax rates applica-
ble at the balance sheet date when the deferred 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 statement. If a tax deduction on computation of the taxable income 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 provisions for tax, deferred tax assets and deferred tax liabilities and the extent
to which deferred tax assets are recognized. GN Audio recognizes deferred tax assets only to the extent that it is probable that taxable profit will be
available against which the temporary dierences and unused tax losses can be utilized.
2.4 Income statement classified by function
GN Audio A/S 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, amortization 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 allocated to the individu-
al line items by function, the income statement will present as follows:
DKK thousand 2023 2022
Revenue 10,202,107 8,700,686
Production costs -7,845,466 -5,883,599
Gross profit 2,356,641 2,817,087
Development costs -803,726 -751,134
Selling and distribution costs -729,552 -649,009
Management and administrative expenses -535,043 -600,409
Other operating income and costs, net -736,132 113,315
Operating profit (loss) -447,812 929,850
In the above income statement amortization of acquired intangible assets has been
allocated to functions as follows:
Development costs -82,845 -81,026
Selling and distribution costs -4,288 -4,288
Amortization of acquired intangible assets -87,133 -85,314
* Excluding gain (loss) on divestments of operations etc. and amortization and impairment of acquired intangible assets, including
amortization of development projects and software developed in-house
11
25 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
Section 3
Operating assets and liabilities
3.1 Intangible assets
DKK thousand
Goodwill
In-house
development
projects Software
Patents and
rights Trademarks Other Total
Cost at January 1 106,369 2,373,916 60,419 554,321 50,280 686 3,145,991
Additions 0 511,771 524 0 0 0 512,295
Cost at December 31 106,369 2,885,687 60,943 554,321 50,280 686 3,658,286
Amortization and impairment at January 1 -37,418 -1,468,483 -57,709 -286,653 -16,275 -274 -1,866,812
Amortization 0 -299,964 -1,881 -82,845 -4,288 0 -388,978
Impairment 0 -115,147 0 0 0 0 -115,147
Amortization and impairment at December 31 -37,418 -1,883,594 -59,590 -369,498 -20,563 -274 -2,370,937
Carrying amount at December 31, 2023 68,951 1,002,093 1,353 184,823 29,717 412 1,287,349
Cost at January 1 106,369 1,856,705 58,803 543,516 50,280 686 2,616,359
Additions 0 517,211 1,616 14,141 0 0 532,968
Disposals 0 0 0 -3,336 0 0 -3,336
Cost at December 31 106,369 2,373,916 60,419 554,321 50,280 686 3,145,991
Amortization and impairment at January 1 -37,418 -1,188,371 -39,443 -208,963 -12,124 -137 -1,486,456
Amortization 0 -253,577 -3,015 -81,026 -4,151 -137 -341,906
Disposals 0 0 -15,251 3,336 0 0 -11,915
Impairment 0 -26,535 0 0 0 0 -26,535
Amortization and impairment at December 31 -37,418 -1,468,483 -57,709 -286,653 -16,275 -274 -1,866,812
Carrying amount at December 31, 2022 68,951 905,433 2,710 267,668 34,005 412 1,279,179
Accounting policies
Development projects, Trademarks, Software, Patents, Licenses and Other Intangible Assets
Intangible assets are measured at cost less accumulated amortization and impairment. Amortization is provided on a straight-line basis over the ex-
pected useful lives of the assets. When changing the depreciation period or the residual value, the eect on the depreciation is recognized prospec-
tively as a change in accounting estimates. Amortization and impairment are 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 1-2 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, sucient resources and a potential future mar-
ket or development opportunities in the Company is evidenced, and where GN Audio intends to produce, market or use the project, are recognized as
intangible assets if it is probable that costs incurred will be covered by future earnings. The cost of such development projects includes direct wages,
salaries, materials and other direct and indirect costs attributable to the development projects. Amortization and write-down of such capitalized
development projects are started at the date of completion and are included in development costs. Other development costs are recognized in the
income statement as incurred.
26 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.1 Intangible assets (Continued)
Impairment of Goodwill, trademarks and in-process development projects
Goodwill is subject to at least one annual impairment test, initially before the end of the acquisition year. Similarly, trademarks and in-progress devel-
opment projects are tested for impairment at least annually.
The carrying amount of goodwill is tested for impairment together with the other non-current assets in the cash-generating unit to which the good-
will 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.
The GN Group’s move to one company geared towards capturing company-wide synergies which will support and accelerate margin improvements
across the Group. In order to capture these synergies, the group has streamlined processes including refined product focus resulting in the impair-
ment of DKK 115 mio on development projects recognized in the 2023 financial year.
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.
Significant accounting estimates and judgments
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 assesses the useful lives of its products to en-
sure that amortization of development projects reflects the useful lives.
27 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.2 Property, plant and equipment
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 components of an item of property, plant and equipment have dierent 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:
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 discontinued. When changing the depreciation period
or the residual value, the eect on the depreciation is recognized prospectively as a change in accounting estimates. Depreciation and impairment is
recognized in the income statement as production costs, development 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 scrap-
ping of an item of property, plant and equipment are determined as the dierence 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 Other operating costs, respectively.
GN Audio A/S has not capitalized any borrowing costs in the current or preceding periods as non-current assets are not financed with debt
DKK thousand
Factory
and office
buildings
Plant and
machinery
Operating
assets and
equipment
Assets
under
construction Total
Cost at January 1 0 628,661 42,959 13,727 685,347
Additions 0 18,845 300 -4,803 14,342
Transfers 0 4,317 0 0 4,317
Cost at December 31 0 651,823 43,259 8,924 704,006
Depreciation and impairment at January 1 0 -446,505 -29,442 0 -475,947
Depreciation 0 -93,170 -5,179 0 -98,349
Disposals 0 -5 0 0 -5
Depreciation and impairment at December 31 0 -539,680 -34,621 0 -574,301
Carrying amount at December 31, 2023
0 112,143 8,638 8,924 129,705
Leased assets, c.f. note 3.3
14,674 0 1,431 0 16,105
Total carrying amount at December 31, 2023 14,674 112,143 10,069 8,924 145,810
Cost at January 1 0 540,918 36,760 18,061 595,739
Additions 0 0 6,199 83,409 89,608
Transfers 0 87,743 0 -87,743 0
Cost at December 31 0 628,661 42,959 13,727 685,347
Depreciation and impairment at January 1 0 -338,055 -24,482 0 -362,537
Depreciation 0 -107,596 -4,960 0 -112,556
Disposals 0 -854 0 0 -854
Depreciation and impairment at December 31 0 -446,505 -29,442 0 -475,947
Carrying amount at December 31, 2022
0 182,156 13,517 13,727 209,400
Leased assets, c.f. note 3.3 29,768 0 1,276 0 31,044
Total carrying amount at December 31, 2022 29,768 182,156 14,793 13,727 240,444
13
28 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.3 Leases
The following right-of-use assets are included in property, plant and equipment:
Leased assets
DKK thousand
Factory
and office
buildings
Operating
assets and
equipment Total
Carrying amount at January 1 29,768 1,276 31,044
Additions 0 823 823
Depreciation -15,094 -668 -15,762
Carrying amount at December 31, 2023 14,674 1,431 16,105
Carrying amount at January 1 44,862 1,153 46,015
Additions 0 1,050 1,050
Depreciation -15,094 -927 -16,021
Carrying amount at December 31, 2022 29,768 1,276 31,044
Lease liabilities
DKK thousand 2023 2022
Contractual maturity analysis of lease liabilities:
Less than one year 15,548 16,120
Between one and three years 946 15,903
Total 16,494 32,023
Amounts expensed in the income statement and total cash outflow
DKK thousand 2023 2022
Interest expense on lease liabilities 230 386
Total cash outflow for leases 16,494 16,493
14
GN Audio’s leases mainly consist of property leases of e.g. oces but also include cars and oce equipment. Rental contracts are typically 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 dierent terms and conditions.
29 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.3 Leases (Continued)
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 profit 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 straight-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 are leases with a lease term of 12 months or less. Low-value assets comprise e.g. IT-equipment and small items of oce 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 in
terms of managing contracts.
30 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.4 Depreciation, amortization and impairment
DKK thousand 2023 2022
Depreciation, amortization and impairment for the year of property, plant and equipment (incl.
leased assets) and intangible assets are recognized in the income statement as follows:
Production costs -70,047 -109,579
Development costs -444,893 -286,209
Selling and distribution costs -614 -844
Management and administrative expenses -15,549 -15,925
Amortization and impairment of acquired intangible assets -87,133 -85,315
Total -618,236 -497,872
Depreciation of property, plant and equipment (inc. leased assets)
is recognized in the income statement as follows:
Production costs -69,931 -109,633
Development costs -28,250 -4,278
Selling and distribution costs -498 -100
Management and administrative expenses -15,432 -15,525
Total -114,111 -129,536
Production costs -116 -51
Development costs -301,496 -255,396
Selling and distribution costs -116 -744
Management and administrative expenses -117 -400
Amortization and impairment of acquired intangible assets -87,133 -85,315
Total -388,978 -341,906
Impairment of intangible assets is recognized in the income statement as follows:
Production costs 0 105
Development costs -115,147 -26,535
Total -115,147 -26,430
Amortization of intangible assets is recognized in the income statement as follows:
15
31 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.5 Inventories
DKK thousand 2023 2022
Raw materials and consumables 100,595 154,842
Finished goods and merchandise 914,271 1,139,949
Total 1,014,865 1,294,791
The above includes write-downs amounting to 100,177 96,110
Costs of goods sold included in Production Costs 7,545,217 5,621,729
16
Accounting policies
Inventories
Inventories are measured at cost in accordance with the FIFO-principle.
Raw materials and goods for resale are measured at cost, comprising purchase price plus delivery costs.
Where the net realizable value is lower than cost, inventories are written down to this lower value. The net realizable value of inventories is calculated
as the sales amount less costs of completion and costs necessary to make the sale.
32 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.6 Provisions
DKK thousand
Warranty
provisions
Other
provisions Total
Provisions at January 1 40,688 46,615 87,303
Additions 3,382 0 3,382
Released 0 -14,202 -14,202
Provisions at December 31, 2023 44,070 32,413 76,483
Which is presented in the balance sheet as:
Non-current liabilities 28,645 32,414 61,059
Current liabilities 15,424 0 15,424
Provisions at December 31, 2023 44,069 32,414 76,483
17
Warranty provisions concern products sold. The warranty provision covers any defects in design, materials and workmanship for a period of 1-2 years
from delivery and completion.
Other provisions primarily consist of provisions for legal disputes. GN Audio A/S’s assessment of credit risk associated with individual receivables
depends primarily on aging, change in customer payment behavior, current economic conditions etc. as described in significant accounting estimates.
No security has been pledged to GN Audio A/S for trade receivables.
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.
Other provisions primarily comprise onerous contracts. Provisions are recognized when, as a result of events before or at the balance sheet date, GN
Audio A/S has a legal or a constructive obligation and it is probable that there may be an outflow of resources embodying economic benefits to set-
tle the obligation. On measurement of provisions, the costs required to settle the liability are discounted if the eect is material to the measurement
of the liability.
33 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.7 Trade receivables
DKK thousand Current
1-60 days
past due
61-90 days
past due
91-120
days past
due
121-180
days past
due
More than
181 days
past due Total
Gross carrying amount - Trade receivables 145,699 0 0 82 0 504 146,285
Write-downs at December 31 -166 0 0 0 0 0 -166
Trade receivables at December 31, 2023 145,533 0 0 82 0 504 146,119
Expected loss rate
-0.1% 0.0% 0.0% -0.1%
Gross carrying amount - Trade receivables 254,631 27,900 769 359 1,115 1,545 286,319
Write-downs at December 31 -458 -168 -1 -1 -2 -3 -633
Trade receivables at December 31, 2022 254,173 27,732 768 358 1,113 1,542 285,686
Expected loss rate
-0.2% -0.6% -0.1% -0.3% -0.2% -0.2% -0.2%
DKK thousand 2023 2022
Write-downs at January 1 -633 -1,312
Decrease in loss allowance during the year 51 382
Written off as uncollectible 0 -106
Reversal of unused loss allowance 416 403
Write-downs at December 31 -166 -633
The loss allowance included in total trade receivables, based on the above aging profile and expected loss rates, have developed as follows:
18
GN Audio A/S’s assessment of credit risk associated with individual receivables depends primarily on aging, change in customer payment behavior,
current economic conditions etc. as described in significant accounting estimates.
No security has been pledged to GN Audio A/S for trade receivables.
Accounting policies
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 Audio or 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.
34 Financial statements – Operating assets and liabilities
Contents
GN Audio A/S Annual Report 2023
3.8 Investment in subsidiaries
Subsidiaries are listed at the end of this report.
Accounting policies
Investment in subsidiaries
Investments in subsidiaries are measured at cost. Investments are written down to the lower of cost and recoverable amount.
DKK thousand
2023 2022
Cost at January 1 8,721,081 1,403,313
Additions, capital contribution 2,034,853 7,317,768
Disposals -966,567 0
Impairment -63,653 0
Cost at December 31 9,725,714 8,721,081
35 Financial statements – Financing items
Contents
GN Audio A/S Annual Report 2023
Section 4
Financing items
4.1 Financial risks
GN Audio is exposed to financial risks arising from its operating, investing, and financing activities, comprising currency risk, liquidity risk and credit
risk. Financial risks are managed centrally and on group level by Group Treasury, except for commercial credit risk which is managed by GN Audio
A/S’s operating business. The Group’s Treasury Policy has been reviewed by the group Audit Committee and approved by the Board of Directors in
GN Store Nord.
Foreign currency risk
GN Audio A/S has exposure towards foreign currencies exchange rate risk, mainly arising from the fluctuations of USD in connection with commer-
cial transactions. The general policy is to minimize the 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 results. Additionally approved hedging in-
struments are used, including currency derivatives such as FX Spot, FX Forward, FX Swaps and FX Option contracts, to protect EBITA and Free Cash
Flow from adverse currency movements by determining the aggregate of the expected net cash flow 12 months forward and monetary balance
sheet items.
Sensitivity analysis for foreign currency risk
Change in GN Audio A/S’s profit or loss in response to a weakening / strengthening of the currencies of which GN Audio A/S 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 5%
in the USD/DKK and GBP/DKK exchange rates would aect the Income Statement (financial items) and Other Comprehensive income as outlined in
the table below.
The above exposure at year-end is not necessarily representative of the past or future exposure of the Company.
Interest rate risk
The exposure to interest rate risk is considered to be low due to the capital structure and low duration.
Liquidity risk and funding
Cash flow, liquid funds and debt are coordinated centrally by Group Treasury to ensure the solvency and liquidity of the GN Group including GN Audio A/S.
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 Audio A/S may incur
losses if the credit quality of its customers deteriorates or if they default on their payment obligations to GN Audio. GN Audio’s exposure to credit risk
arises primarily from trade and other receivables. Assessment of credit risks related to customers is further described in note 3.7 Trade receivables.
Trade receivables
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.
DKK thousand
2023 2022 2023 2022
Income statement -37,682 -53,328 2,278 2,797
Other Comprehensive Income 206,388 202,194 -22,983 -27,878
USD
GBP
20
36 Financial statements – Financing items
Contents
GN Audio A/S Annual Report 2023
4.2 Financial income and expenses
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, receivables,
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.
DKK thousand 2023 2022
Financial income:
Dividends received 850,685 177,178
Fair value adjustments of derivative financial instruments -508 21,926
Foreign exchange gain 17,536 24,377
Total 867,713 223,481
Financial expenses:
Interest expenses* -28 -134
Intercompany Interest expense* -158,556 -75,191
Financial expenses, other -10,038 -6,036
Foreign exchange loss -10,314 -14,109
Total -178,936 -95,470
*Interest income and expenses from financial assets and liabilities at amortized cost
21
*Interest income and expenses from financial assets and liabilities.
37 Financial statements – Financing items
Contents
GN Audio A/S Annual Report 2023
4.3 Financial Instruments
Contractual maturity analysis for financial liabilities
DKK thousand
Less than one
year
Between one
and three
years
More than
three years Total
2023
Amounts owed to subsidiaries and group companies 340,797 0 0 340,797
Trade payables 1,005,378 0 0 1,005,378
Total non-derivative financial liabilities 1,346,175 0 0 1,346,175
Derivative financial liabilities -39,049 0 0 -39,049
Total financial liabilities 1,307,126 0 0 1,307,126
2022
Amounts owed to subsidiaries and group companies 5,240,801 0 0 5,240,801
Trade payables 707,361 0 0 707,361
Total non-derivative financial liabilities 5,948,162 0 0 5,948,162
Derivative financial liabilities 136,242 0 0 136,242
Total financial liabilities 6,084,404 0 0 6,084,404
The maturity analysis is based on non-discounted cash flows.
Derivative financial instruments
Exchange rate instruments
2023
2022
DKK thousand
Average
rate (DKK)
Contract
amount, net*
Fair value,
assets
Fair value,
liabilities
Average rate
(DKK)
Contract
amount, net*
Fair value,
assets
Fair value,
liabilities
USD / DKK
674 -2,069,267 3,717 -30,470 729 -2,113,626 0 119,139
INR / DKK
8 228,937 3,092 -1,125 9 323,877 16,925 0
GBP / DKK
858 453,292 396 -1,894 839 558,006 6,756 0
HKD / DKK
86 -13,736 71 -259 93 -108,862 0 5,874
JPY / DKK
5 75,182 129 -231 5 103,496 0 4,074
BRL / DKK
139 14,361 27 -481 133 55,946 4,027 0
CNY / DKK
95 -17,728 0 -589 103 -159,647 0 2,712
AUD / DKK
458 185,571 0 -2,703 475 278,080 2,514 0
SEK / DKK
67 -10,931 1,360 -913 69 -41,138 0 1,106
SGD / DKK
511 -42,931 618 -238 522 -83,587 0 1,472
Other currency pairs
575 12,504 309 -146 692 114,044 3,357 1,864
Total 9,719 -39,049 33,579 -136,241
Fair value adjustments of cash flow hedges
DKK thousand 2023 2022
Fair value adjustment for the year recognized in Other comprehensive income
73,063 -89,505
Reclassified from equity to revenue during the year
3,380 1,239
Reclassified from equity to production costs during the year -3,111 -19,813
Adjustment of cash flow hedges in Other comprehensive income 73,332 -108,079
Fair value adjustment of cash flow hedges recognized in Other operating income and costs, net -1,962 109,185
All exchange rate instruments mature within 12 months from the balance sheet date.
38 Financial statements – Financing items
Contents
GN Audio A/S Annual Report 2023
4.3 Financial Instruments (Continued)
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 deriva-
tive 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. 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 in-
struments designated as and qualifying as a cash flow hedge that is an eective hedge of changes in the value of the hedged item are recognized in
other comprehensive income. If the hedged transaction results in gains or losses, amounts previously recognized in other comprehensive 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 previously 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 imme-
diately 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.
Financial Liabilities
Amounts owed to credit institutions and banks 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 eective interest
rate. Accordingly, the dierence between the proceeds and the nominal value is recognized in the income statement over the term of the loan.
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
DKK thousand 2023 2022
Financial assets
Trade receivables 146,119 285,686
Amounts owed by subsidiaries and group companies 823,262 384,027
Other receivables 155,980 158,227
Cash or cash equivalents 3,795 222
Financial assets at amortized cost 1,129,156 828,162
Derivative financial instruments included in Other receivables 9,718 33,579
Financial assets at fair value through Other comprehensive income 9,718 33,579
Financial liabilities
Lease liabilities 16,494 31,602
Amounts owed by subsidiaries and group companies 340,797 5,240,801
Other current liabilities 877,167 1,011,435
Trade payables 1,005,378 707,361
Financial liabilities at amortized cost 2,239,836 6,991,199
Derivative financial instruments included in Other liabilities -39,049 -136,241
Financial liabilities at fair value through Other comprehensive income -39,049 -136,241
39 Financial statements – Other disclosures
Contents
GN Audio A/S Annual Report 2023
Section 5
Other disclosures
5.1 Share-based incentive plans
Warrant and option programs.
GN Audio A/S 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 and GN Audio A/S. For members of Executive
Management, the grant size can vary between 50-100% of their base salary. Warrants and options are granted at no consideration.
Calculation of share price
The 2019 - 2022 option program is based on GN Store Nord A/S shares, whereas warrant programs for 2015 - 2018 are based on GN Audio A/S
shares. On a quarterly basis the share price for 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 Audio. This calculation is also the basis for the Black-Scholes valuation as stated below
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 criteria
are met: The share value of GN Store Nord has increased and the share value of GN Audio has outperformed a peer group index of competitors and
industry indices, as defined by the Board of Directors of GN Audio. 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 Valuation
Report concerning the value of the shares of GN Audio.
Vesting conditions and exercise of options
The 2019 - 2022 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 performance rela-
tive to a peer group. The maximum eect of the performance 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 market value of the warrants and options are calculated using the principles of the Black-Scholes option pricing model. For the 2015 - 2018
warrants the model has taken the overperformance criteria into account using Monte Carlo simulation. The market values of options granted during
the year are based on the underlying market prices at the grant dates.
The following assumptions were applied for the calculation of the market value at the grant date of GN Store Nord A/S options:
Executive
Management
Other
employees
Executive
Management
Other
employees
Number of options / warrants granted in the year
- 574,195 62,500 268,451
Share price GN Store Nord at ordinary grant date 167 167 351
351
Vesting period 3 years 3 years 3 years 3 years
Life of option / warrant 6 years 6 years 6 years
6 years
Volatility* 0% 42% 34% 34%
Expected dividend 0.0% 5.0% 0.3% 0.4%
Risk-free interest rate** 0.00% 0.00% 0.00% 0.00%
Fair Value per option / warrant at ordinary grant (DKK) *** - 61 81
100
Total market value at grant (DKK million) - 35 5
27
Amortization period of the program 2023 - 2026 2023 - 2026 2022 - 2025 2022 - 2025
GN Store Nord A/S GN Store Nord A/S
2023 2022
* Volatility is estimated by external experts, and is calculated based on data from a historical period matching the expected time to expiry of the warrants
and 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 warrants and options
*** The fair value assumes a perfomance multiplier of 1
24
40 Financial statements – Other disclosures
Contents
GN Audio A/S Annual Report 2023
5.1 Share-based incentive plans (Continued)
The exercise price for the warrants and options is based on the average share price for GN Store Nord in the five days following the release of the
annual report in the year in which the relevant warrants and options are awarded.
Exercise of warrants
When employees exercise their warrants, they are exchanged with shares in GN Store Nord A/S based on relationship between the value of the
warrant in GN Audio and the value of the GN Store Nord A/S share at the time of exercise. Hereafter the employee is free to keep the GN Store Nord
A/S share or sell it on the open market.
Warrant and option programs
GN Audio A/S
DKK Number
Average
exercise
price
Executive
Management
Other
employees
Total
Outstanding warrants at January 1, 2022 31,777 1,150
336 1,486
Warrants exercised during the year
29,227 -494
-132 -626
Warrants forfeited during the year 28,794 0
-47 -47
Outstanding warrants at December 31, 2022
33,913 656
157 813
Warrants exercised during the year 33,913 -656
-148 -804
Warrants forfeited during the year 33,913 0
-9 -9
Outstanding warrants at December 31, 2023 0 0
0 0
Weighted average term to maturity
N/A N/A
N/A
Number of exercisable warrants at December 31, 2022 656
157 813
Number of exercisable warrants at December 31, 2023
0
0 0
GN Store Nord A/S
DKK Number
Average
exercise
price
Executive
Management
Other
employees
Total
Outstanding options at January 1, 2022 391 174,464 626,508 800,972
options granted during the year
340 62,500 268,451 330,951
option increase from multiplier at vesting
313 53,625 188,089 241,714
options forfeited during the year
369 0 -65,744 -65,744
Outstanding options at December 31, 2022
370 290,589 1,017,304 1,307,893
Options granted during the year
164 0 574,195 574,195
Options forfeited during the year
355 -58,936 -312,099 -371,035
Outstanding options at December 31, 2023
370 231,653 1,279,400 1,511,053
* Transfers relate to options transferred between GN Group companies due to changes in executive management
Weighted average term to maturity (Years)
2.4 3.6 3.4
Number of exercisable options at December 31, 2022
129,153 414,077 543,230
Number of exercisable options at December 31, 2023
129,153 375,989 505,142
Recognition of expenses on warrants 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 recognised expenses in 2023 include acceleration of 140,401, warrants granted to
Executive Management and Other employees, respectively for GN Audio A/S.
25
41 Financial statements – Other disclosures
Contents
GN Audio A/S Annual Report 2023
5.1 Share-based incentive plans (Continued)
Outstanding warrants in GN Audio by grant date are shown below:
Outstanding options in GN Store Nord A/S by grant date are shown below:
Accounting policies
Incentive plans
The Executive Management and a number of key employees are included in share-based payment plans (equity-settled plans). For equity-settled
programs, the warrants and options are measured at the fair value at the grant date and recognized in the income statement as a sta cost of the
respective functions over the vesting period. The counter item is recognized in equity. On initial recognition, an estimate is made of the number of
warrants and options expected to vest. This estimate is subsequently revised 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 conditions are taken into account when estimating the fair value of the warrants and
options.
GN Audio A/S
DKK Number
Grant date
Exercise
price
Executive
Management
Other
employees
Total
February 2018 33,913 656 157 813
February 2018 33,913 -656 -157 -813
Outstanding warrants at December 31, 2023 0 0 0
26
GN Store Nord A/S
DKK Number*
Grant date
Exercise
price
Executive
Management
Other
employees
Total
April 2019 ** 313 129,153 375,989 505,142
February 2021 550 40,000 121,550 161,550
February 2022 368 62,500 227,544 290,044
March 2022 307 - 3,944 3,944
May 2022 224 - 6,708 6,708
September 2022 209 - 8,855 8,855
February 2023 164 - 526,208 526,208
April 2023 149 - 4,215 4,215
October 2023 125 - 4,387
4,387
Outstanding options at December 31, 2023 231,653 1,279,400 1,511,053
* The performance multiplier can decrease the number of options or as maximum effect increase the number of options by a factor of 2
** For the 2019 program number of options increased by multiplier of 1.71
27
42 Financial statements – Other disclosures
Contents
GN Audio A/S Annual Report 2023
5.2 Contingent assets and liabilities
Security
GN Audio A/S has not pledged any assets as security in the present or prior financial years.
Purchase obligations
GN Audio A/S has agreed with some suppliers that they will purchase components for the production of headsets based on sales estimates prepared
by GN. To the extent that GN’s sales estimates exceed actual purchases from suppliers, GN Audio A/S is under an obligation to purchase any remain-
ing 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, a provision is recognized for onerous purchase contracts.
Pending litigations and disputes
GN Audio A/S 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 Audio does not expect the pending litigations and
claims to have a material impact on the financial position, operating profit or cash flows in addition to the amounts recognized as
provisions for legal disputes.
5.3 Other non-cash adjustments
5.4 Fees to statutory auditors
DKK thousand 2023 2022
Share-based payment (granted) -464 51,887
Provision for bad debt and inventory write-downs 3,600 3,424
Adjustment of provisions -10,820 -105,166
Sale of investment in subsidiares 966,577 0
Fair value adjusments of cash flow hedges 73,332 -104,937
Other adjustments -13,691 -16,033
Total 1,018,534 -170,825
29
DKK thousand 2023 2022
Statutory audit -646 -1,145
Other assurance related service 0 -86
Other services -126 -583
Fee to statutory auditors -772 -1,814
30
43 Financial statements – Other disclosures
Contents
GN Audio A/S Annual Report 2023
5.5 Related parties
GN Audio A/S is controlled by GN Store Nord A/S. The related parties exercising significant influence comprise GN Store Nord A/S’s subsidiaries,
members of the Board of Directors and the Executive Management and senior employees and their family members.
In addition, related parties comprise group enterprises over which GN Audio A/S exercises control or significant influence.
Group enterprises are listed at the end of the report.
Board of Directors, Executive Management and Senior Employees
Management remuneration and incentive plans are described in note 2.2 and 5.2.
Group enterprises and associates
Trade with group enterprises comprised:
The company’s balances with group enterprises on December 31, 2023 are shown separately in the balance sheet. Interest income and expenses
with respect to group enterprises are disclosed in note 4.2. Further, balances with group enterprises comprise trade balances related to the purchase
and sale of goods and services. The Company has received a letter of support from the parent company GN Store Nord A/S. The letter is eective
until 1 April 2025.
Purchases of services from group enterprises and GN Store Nord A/S consists of facility services, canteen services, management fee, R&D services,
marketing services and IT services. Sales of services to group enterprises consists of management fee. Sale and purchase of intangible assets consist
of sales and purchase of software to and from the parent company.
No transactions have been carried out with the Board of Directors, the Executive Management, senior employees or other related parties, apart from
ordinary remuneration disclosed in notes 2.2 and 5.1.
DKK million 2023 2022
GN Store Nord A/S
Sale of services 484 470
Purchase of services 22 -4
Subsidiaries
Purchase of services -511 -482
Sale of goods to group enterprises, revenue 6,889 7,567
44 Financial statements – List of companies in GN Hearing Group
Contents
GN Audio A/S Annual Report 2023
Companies in GN Audio Group
Domicile Currency Ownership % Share capital
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
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 100 409.8
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
GN Audio Germany GmbH Germany EUR 100 51.1
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 10.2
GN Audio Japan Ltd. Japan JPY 100 10,000,000
GN Audio Benelux B.V.** Netherlands EUR 100 18
GN Audio Philippines, Inc. Philippines PHP 100 10,000,000
GN Audio Poland Sp. Z.o.o. Poland PLN 100 50
GN Audio Singapore Pte. Ltd. Singapore SGD 100 700
Jabra Connect Singapore Pte.Ltd. Singapore USD 51 12
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
GN Audio USA Inc. USA USD 100 82,500,000
Falcom US, LLC* USA USD 100 -
SteelSeries ApS Denmark DKK 100 160
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
3D Aim Trainer BV Belgium EUR 100 2,079,502
Associates
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.
45
Contents
GN Audio A/S Annual Report 2023
GN Audio A/S
Lautrupbjerg 7
2750 Ballerup
Denmark
Co.reg. no 15 06 95 11
+45 45 75 88 88
info@gn.com
gn.com
© 2024 GN Audio A/S. All rights reserved. Jabra, BlueParrott, FalCom, SteelSeries are trademarks of GN Audio A/S.
All other trademarks and logos included herein are the property of their respective owners.