GN Store Nord A/S (GN) Earnings Call Transcript & Summary

Hello, everyone. Thank you for joining today, GN's 2024 Capital Markets Day. We are super exited to see so many faces here in the building. We're also streaming online, so welcome to those of you joining online. It's super sunny weather today in Copenhagen, and at least that's the excitement we want to bring you with the stories we want to tell. My name is Rune, and I'm heading up Investor Relations in GN. So what we will cover for today for a very rough highlight agenda, is that Peter will start in a few seconds, unfolding what you think is GN's value potential over the coming years. Then we have a session called Driving success in our 3 divisions, Hearing, Enterprise, Gaming & Consumer. We will also touch upon what we call winning through One GN through our functions of scale, where we will deep dive into customer-centric innovation and also operations set up and how we think that is agile and scalable. Finally, Soren will summary with the day with how this means for our financial aspirations for the coming few years. There will be multiple breaks during the day, a lot of opportunity volume to ask questions. We'll have the full management team up here for the session, both with CEO and CFO and the Divisions. In the breaks, I really encourage you to visit our good colleagues that are standing around here, all from hearing aids, to video equipment, to gaming gears, Enterprise and so forth. There will always -- also be the opportunity for those of you online, to ask questions. [Operator Instructions]. Finally, at the end of the day, for those that are here in person, we also have the opportunity to have a guided tour in our R&D lab. On the back of your name tag, there is a QR code. If you're interested in participating here at 7:30-ish. You can sign up for the guided tour. If you forget, it's fine, we'll do it anyhow, but just to get a feeling of how many that will do that tour as well. And with that very short introduction, I will hand over to Peter in a second, but first start with a short video showcasing our purpose. [Presentation]

Hello, everyone. Great to see you, and also on behalf of myself, a warm welcome here to Ballerup for those of you that are in the room. And also a warm welcome to all of you around the world joining us online. We very much look forward to spend the afternoon here together to lay out a little bit more how we see the future of GN and the plans we have as a team. So as Rune highlighted here in the opening, we have the majority of our global leadership team here with us today and the majority will be on stage and talk about our business. I like just to kick us off, giving the summary in a holistic way. Everything I say will, in one way or the other, be covered in more detail throughout the day. So don't worry if you don't get all the answers in the opening, hopefully, you will get more of that in the coming hours. And as such, also, we do not plan a Q&A right after my session. We're taking it in all end of the sessions. And then towards the end of the day, Soren and I will have a longer Q&A summing it all up. And also, Rune, you made a good marketing gig for the brakes. I know it's a busy time for many of us. I'm sure there are a few calls in the break. I know it's a busy time for many of us. I'm sure there are a few calls in the break, but if you can really walk around where we're showcasing our innovation. We have brought the best of our marketing staff here. So these are the people actually traveling around the world demoing what we do at different industry fairs. Before I start to talk about the future, let me just briefly reflect on the past. And doing this because it's important for us, and I think it is really what is creating our culture and also what is -- many have been the reason of coming here and staying in GN in a long time. And that is essentially the history. We've been a technology company for more than 150 years. We started actually 155 years ago by laying telegraph lines between Denmark and Far East, including China way. That was the first way you could do communication in an easy way before it took weeks before getting messages passed around. From that day, GN has been a technology company. And from that day been in communication in a wider sense. A lot have changed, of course. There's been some great times, some challenging times. The company has renewed itself many, many times over, but what have stayed the same is this kind of relentless drive to bring new things to the world. Here are just a few things in this overview. And as you can see, it spans from way back to quite recent, and we also left out quite a bit of innovations during the years. But this is really continued to drive us, bringing new innovation that help people communicate better. And that help people in the daily lives to hear each other better, if you are hearing impaired or at work to communicate better or when you have some fun time gaming or just enjoying the life in general, it really ties us together in a very nice way. This is also what have essentially been the bedrock for our purpose. A purpose means a lot to people at GN, which is about bringing people closer. And we do this for all these different ways of communication. And I think this is great because we're here to create a fantastic business, but it's also something that creates a lot of meaning to our employees. We're helping people in a wider sense of living their lives in a better way, being at home, being at work or being when they have a little bit of fun. If we look on where we are today, we are truly a global company. And I think that is, I think, important to reflect on. We, of course, a Danish company in some ways. And we're, of course, having our headquarter here where we are, listed on the Danish Stock Exchange. But the way we think and the way we operate is like a truly global company. We have R&D. We have manufacturing. We have sales, we have administration across each of the continents. And if you look on our kind of market success, I would say it's fairly equally weighted across all our divisions on a global basis. So we have a very global mindset when we develop our businesses. And I think it's also what creates the strength of the company. We have really made it through a global presence and also benefit from being a global company today. We have 7,000 employees. But perhaps what is even more telling is that we're producing a product every second. And some of you might say, okay, is that a lot. It is quite a lot. During this meeting, we will have in the next few hours, we have produced a bit more than 20,000 products. Just thinking about them on the parking lot getting loaded on trucks being shipped around the world. And perhaps most importantly, they will arrive at the destination whether it's a user that then enjoying these products for years. And we're doing one product per second all the time, day and night throughout the year. GN wouldn't be a great company without the fantastic employees we have. And I know many employees, they are logged on now to actually hear our future and our story at the same time as U.S. investors and analysts do. And let me just first say big thanks to all employees. You are the ones making GN a great company. You are the ones really creating the future for us. I also like to reflect on the diversity of this workforce. It's truly located, as I mentioned around the world. It includes everything from very young people to old people. I think it includes many, many ethnicities across the world and also in terms of gender fairly equally distributed in most parts of the world. This is a great strength of GN. Also, when we do our business, it's very important for us to do that in a way that is sustainable. It needs to be good for people and good for the environment. And we are making a lot of progress as a company in terms of having a more sustainable production methods, recyclable plastics, better packaging. We also take a lot of efforts into using energy in a better way. More -- I mean more kind of renewable energy in everything we do in our factories, to office buildings and so on. And Maurits is here today actually that leads our sustainability, having a station also outside, so you can visit him also to understand more about what we're doing. We've set ourselves ambitious targets, both at 2030 and actually to be net-zero in terms of emissions by 2050. We take a lot of pride in this also hand-in-hand we're developing the great business, of course. Let me now gradually move into the business side of GN. And I'm starting here with a page with some of the most powerful global trends that affect us. And you know a lot about how markets are both created and sometimes destroyed by global trends. We think we are in a very good place with GN where we actually think will largely benefit from what's happening in the world. And that's great, and it goes across the markets. First, there is a kind of an aging development of the population in combination with more health awareness that will really support the Hearing Aid market. Secondly, hybrid work is here to stay. I don't think anyone would dispute that. We work in different ways. We likely will not go back to how it was like 5, 10 years ago. And then gaming, maybe not all of you are gamers, but you should know that gaming is something getting really mainstream. Gamers exists today of all kinds of age and background. This is not like male teenagers in a basement any longer is really a global market created for everyone, and it's changing even more every day here. But then also a few other things. We are more and more demanding on technology. We like it to be personalized. We like it to be ours. We like it to be adaptable to what we like to see. They're putting a lot more kind of pressure on what great technology is. And a lot of the great technologies around the world is actually created in consumer space because that's when we're most demanding, but you now need to bring that also to the enterprise era to be successful. Then of course, AI. This can probably be both a threat and opportunity to most businesses. For us, we profoundly believe it's an opportunity. Opportunity to become a better company, but also to create a lot of great innovation that we will talk about later today. And then as I mentioned before, sustainability, we think we're well placed with the setup we have today around the world. I will now just touch upon our 3 markets, Hearing, Enterprise as well as Gaming & Consumer. You will get a much more deep dive here very soon throughout the day. But let me just start with saying, we believe we are in 3 great markets. The markets are supported by structural positive trends. Let's start with the Hearing market. As I think most of us would agree this is a resilient, a fairly noncyclical market with some good entry barriers, making this a great market to be. We think it's driven, of course, by an aging population and health awareness. And we believe that this market has a lot more to do to find the full adaptation of great hearing aids around the world. And here, we have made some fantastic progress that I hope most of you will recognize with the Omnia platform and Nexia platform growing faster than the market for the quite some periods now. We have a very strong innovation engine here to really understand what matters for users and customers around the world and then deliver on that with great quality. But we also take a lot of pride to be a very strong partner. We have not integrated as much across the value chain as some of the other players have. Instead, we forge strong partnerships and partner across the value chain in strategic ways. We are big enough to be a very relevant partner and by forging the right partnerships, we believe we can do a lot to drive success that really is meaningful for the industry. And then lastly, this is about modernization of the whole kind of operations area and supply chain. This needs to go hand-in-hand with our growth. And we also believe here One GN is a great strength for us. Stefan will cover this later in the afternoon. Then the enterprise market. I said before, hybrid work is here to stay. I travel a lot to see big companies. I'm sure you also do many of you. And I will say every new office that has been refurbished, I would say, in the last 2 years or so, tend to be a somewhat smaller office but much more technology-rich. And I think that's the trend. That is what we should expect to see. We will have less physical space, but more technology to work better at work, but also when we travel or working from home. Calum will speak more about the trends around our markets and enterprise here very soon, but it's a great market. We also believe here AI is super interesting. AI will change the way companies work but also the way we interact with computers and technologies. And we are, with our both headsets and video systems a gateway to a lot of the AI services, and we can do a lot of innovation around this to make this even better in the future. And then lastly, it is an attractive industry in terms of profitability and it's relatively difficult to enter this industry because you need to operate on a global scale and need to drive success on a global scale to succeed. And here, we think we are very well positioned. We've been early into this market, and we've been really driving innovation around hybrid work for a long time. And as such, we also have forged some very strong partnerships with other leading companies in the world. I don't think any company can do this by themselves. It's a lot about how you do something that you are great at, but then that you partner here again across the value chain to create end-to-end services for enterprises. And we travel often to headquarters of very big companies and have this kind of partnership like meetings and quite often, they come here to Ballerup as well to really shape the future together. And then the go-to-market around the enterprise. Here, we work fully in the partnership model with distributors and resellers. And this is a relationship forged over a long time and real relationships that are win-win. We need each other and we are winning together. And these relationships have really helped us also to build enterprise where we are today, and we believe so also into the future. Calum will come back to a lot of this relatively soon. Then the third area is, of course, Gaming & Consumer. And let me just say, this is a fascinating market, and consumer, we have really sharpened our value propositions, and you will see some sports-focused demos here outside illustrating the active profile we have on consumer. And when it comes to gaming, there is a great gaming stand. I'm sure it will be pretty full in the brakes where you can see all the good things we're doing in Gaming. But Gaming, as I said here a while ago, are not for the geeks anymore, it's for everyone. But what's true is that when you're sitting there, you like to win and SteelSeries is the company helping gamers to win. That's why it's so appreciated by everyone that are dedicated and passionate about gamers. But it's also more than products. It developed into very strong software suite tying it all together. The products itself will not do it is really when you add the software layers to it that we also can show and demo here outside. And here, I think we are stronger than anyone in the industry lending a lot of support to our ambition for the future. And then lastly, SteelSeries is a premium-focused company. As I will say, we are also in Enterprise and on the Hearing side, and as such, we are striving for a great experience but also expect to be able to price our products well and as such, creating a strong business of this over time. So these were the 3 markets and then how do we organize to go after this? Each of the market has a team we call them divisions, that are really dedicated to win in these markets to innovate, to make sure we provide value to the customers and really, really understand the markets better than anyone else. But then also, we have our shared capabilities at GN. These are people work in R&D, operations and the core administrative functions. And they are supporting the business across really helping the divisions to be even better together than they would have been stand-alone. And just for you to reflect on this, we have more employees working in the horizontal share capabilities than what we have in the dedicated divisional teams. That's how we are organized, and that's how much we believe in this. And I think it's also already now starting to yield some tangible benefits. You've seen some early results on margins. Over time, we believe a lot will also come from innovation. And here, Christoph with Team and Stefan, they will talk more about this here later today. The capabilities, which we believe in and that we are really working to strengthen, they're strong today, but we're investing to make them even stronger are these 3. The first one is the customer-centric innovation. And it's really the R&D, of course, with innovation, but it's also the link to the market. So here is really the interplay with the divisions, product management, and really how can we make sure we have very productive R&D, and we are investing in the right things, developing things in the right way. Here, we are good today, I will say, across the divisions and working well together will make us even stronger. Then I mentioned the partnerships several times already, and you will hear it throughout the day. And as we've been going through this strategy process, it's becoming more and more clear to us how important this is. In technology, very few companies winning by themselves. Even the largest companies in the world, they partner to win. You cannot do it all yourself. It is about how to be great in well-defined areas and then really be the trusted partner forge long-term partnerships across value chains. And here, I think we already are in a great positions and have made great progress, but there are even more we can do. And then lastly, the whole operations area. And here, Stefan will lay out both the massive setup we have, but also the flexibility and agility we have in this setup and working well together here will again really make us a stronger company. We care about all stakeholders, but it would be a missed opportunity to not talk about our shareholders a day like this. So let me just zoom in and make a few comments around this. This is really our commitment to shareholders, investors, analysts, we're deeply focused on creating value. The way we think about this is a combination of things, of course. The first one is to make sure we operate in attractive markets. We really believe we do that today. And we really believe that the markets where we're operating are attractive. But it's, of course, also about submarkets and segments of markets and if we find new opportunities, we will be ready to enter if we find synergies and believe we can win. But it's also true the opposite. If some markets we're in, we, over time, find them less attractive, we will make the difficult decisions. It's very important for us to stay there. We are ready to make those decisions, if necessary. Secondly, growth is the key to us. But only if we can do it with healthy margins. We really like to find a balance between a good growth and healthy margins. There's been period in the past, we've probably been growing better than producing margins, really like to find the balance here. And we're very much focused on margin improvements, in particular in the short term because the margins have not been good enough. But over time, as we're refining the right margin levels, really find in the balance here between healthy growth and healthy margins. And a bit linked to these two is, of course, how we allocate capital. We're doing this on the yearly processes and investment decisions and can also be done in different type of M&As. What we like to really make sure is that we are committing to that any incremental capital we put at work. We do that with line of sight with good and healthy returns. And then finally, -- we've been in a period with too much depth. We're very committed to delever the company to get back to healthy levels soon. It's part of the targets we announced, and we really like to make this as soon as possible to get back to balance. This page here is almost like a personal page for myself, but it's also something the whole leadership team is sharing. We are, we are said like what do we feel really good about and what the areas we like to see significant improvements on. Let me start with the good areas. We really believe we have the right momentum and model in Hearing. We're making strong progress and have been growing faster than the market and are very committed to do so into the future as well. We feel really good about what we put in place here. Also in enterprise, it's been a difficult market, but our teams have done a phenomenal job in driving innovation, maintaining the trust of key customers and actually maintaining margins in this period and market shares. So we're very well positioned to benefit as the market rebalance and finding its way back to growth. We feel good about that. And then we feel really good about the gaming area as well, also been an area which exploded during COVID and adjusted, but also here, we executed very well, been growing faster than the market and have really strengthened our innovation during this period. These areas, we feel good, even great about these 3 areas. Then the areas for improvement, and some of you have voiced this to us, of course, over time asking questions or sharing your views. OTC, we believe it is a really interesting development of the market. But we need to make sure we do this with good profitability and healthy cash flows. And here, we like to make sure we do that in line with plans and as soon as we can to make sure that also, in total, contributing well to the group financials. Then Video, we entered here 4 years ago. We launched several great products and some of them you will have in demo rooms, some of them here outside. And you will see we have great propositions, but our ambition is not to be a niche player here. We like to be a top player in the industry and video. And as such, we need to see an accelerated growth of the video sales. It need to be fairly significant for us to make us happy. And we've grown already faster than the market, but still, of course, from a small base. We like that acceleration to really take off. And then lastly, you've all seen our historical financials in the new reporting structure. And I think you all noted that low profitability in Gaming & Consumer the last few years. A lot of that has been in gaming -- sorry, in Consumer, while Gaming has performed fairly well. The consumer margins, we have improved quite a bit the last few quarters. Ehtisham will share more about this here very soon, but we are not still where we like to be. The consumer margins need to be on a similar level as at least the gaming businesses to support the overall value creation of GM. So these areas, we're very committed to drive strong focus on and improvements on. So let me just tie it all together, and there were communication going out this morning. So you've probably all seen the update and the midterm targets already. And what we're saying here is that from now until '28, we believe -- organically is important with a focus on organically will grow 5% to 8%. The EBITDA margin, we believe we will be able to achieve 16% to 17% by '28. And then the leverage rate shown 2.0 also by '28. This will likely go faster, but then we commit to stay on that level and use the capital wisely. You will hear a lot more during the day on how we will achieve this. And then we look forward to a closing session here with Soren, where we'll lay out a bit more granularity on the financials and, of course, taking questions also. But once again, a warm welcome here to the day. It's great to see so many of you, and let's make sure we do it really interactive and have a good time together. So thanks, everyone, for joining. And now I can ask Scott to come up the stage to move on to talking a bit more about the hearing market and opportunity.

Thanks Peter. Hi, everybody. It's good to see some familiar faces. So I think the last time I saw many of you was in Nuremberg at [indiscernible] when we were launching Nexia. So happy to share with you a little bit more today about our strategy, how Nexia is doing and where we're sort of headed in the marketplace. When I saw this slide, they put all the good stuff on here, right? The things that aren't on this page are the years that I spent in the '90s, hopping around from a few different jobs from 10 years in consulting, bouncing between industries, doing different types of projects. And it's because I was really looking for what's my purpose, what's my passion, what do I really want to do with my life. And when I was at BCG, I got the opportunity to work with Siemens in this really cool industry called audiology and hearing. And why I fell in love with that industry is, I think hearing is personal. I think a lot of people that work in this industry know someone that has hearing loss. They have gotten to see the benefit that we provide and that our customers provide every day of changing someone's life, letting them be lead a healthier life, a happier life, a longer life. It is really cool what we can do. And if you haven't experienced that with someone, I encourage you to do that. And I think that really fueled my passion for this, but I also find that I'm really lucky that we have a management team now in Hearing that have a couple of centuries of experience within our industry. And I really think that makes a big difference because they are super passionate about what we do and know the marketplace really well. But beyond that, we also have a thousands of employees that share the same passion for our industry and same passion for what we do every day. And so the question for me a little bit was how do we harness that passion? How do we take that and convert that into a strategy and sort of motivate everyone? And so we started thinking about, let's dare ourselves, let's dare ourselves to think differently about R&D and about the products that we're developing. Let's dare ourselves to think a little differently about how we present our products in the marketplace from a marketing standpoint. But also let's dare our customers, right? How can we challenge them to do more within their local markets? How can we push them to get more market share? How can we encourage them to do more outreach in their local communities to outreach to physicians so that they're building those relationships. But it's also how can we dare in users. How could we push them to take that first step in their user journey much sooner and overcome all of these issues that may be going on in their heads that Hearing aid won't work for me or the stigma associated with it, or cost and getting over that. And so we put this together and call it daring to set hearing free. And a little bit of a double meaning in the hearing side. It's both our division, so daring ourselves around that. But it's also the community. It's also the marketplace in which we operate in daring all of them. We have a great set of values inside of GN about listening to the marketplace, listening to our partners, listening to end users really core to what we're doing within hearing. But it's also about challenging ourselves, challenging the status quo, challenging our customers as well. And then how do we transform? Our market is stable and resilient, as Peter mentioned, but also things are changing and how do we adapt to those changes and how do we embrace those changes. And I think it really pulls it together to what GN's overall purpose is around bringing people closer, bringing them closer to their loved ones, bringing them closer to the things they love to do, to the activities they love to do. And that's a huge part of what we do within hearing. And as we think about how do we realize the strategy, for a long time, GN has had a philosophy that we do not compete against our customers. When I am talking to our customers, I share that, our sales team share that. It is very much a part of our value proposition and who we are as a company. And so we lean into this partnership. And so our strategy really centers around how do we build those partnerships? How do we help our customers grow more within their local marketplace? How do we help them get more market share within the areas in which they compete because in turn, that helps our growth. That's our top line. That's how we're pushing our top line. On the other side, it's around how do we build this ecosystem. How do we create this community within so that we are working with our partners in a very integrated fashion so that it's helping to drive our margin. So that gets more to the bottom line, but also so that we can do more for them so that we can be more effective as a company. So the 3 areas I'm going to talk about today, the first one and how we deliver against these is around customer-centric innovation, but it's not just about the product. It does not matter how great a hearing aid is if you don't have the right support to go with it, if you're not a great partner at the same time. And then I also want to spend a few minutes talking about how we are going to modernize more within GN Hearing so that we can be more effective and also drive more efficiencies. So let's spend a couple of minutes on the marketplace. As Peter mentioned, great megatrends that are associated with our space, aging demographic, seniors are more active. It's becoming less stigma associated with wearing a hearing aid. There's more access to hearing aids across the globe. People are taking more care of themselves, embracing their health care, great demographics that we have within our space. The market has been growing at about 4%. We see that continuing 3% to 5% value growth over time. Unit growth, I think, is a bit higher, probably 4% to 6%. We see a little bit of a decline in ASP between channel mix and market mix, but we also see that innovation helps within that, too. So we think the market is probably going to grow 3% to 5%. If I went back in time, when I started, I was looking from about 2001, this trend would look exactly the same. Very good, stable market, only twice of us releasing the dip, once was 2007, 2008, a little bit of a dip there. And then COVID when everything shut down was the only time, we had a really big dip within the market. So a really good space to be in. And we're doing okay. We are -- in 2013, we are back to where we were at the height of our market share. And this year, we're projecting to be at our highest market share ever. And I think there are 3 things that have really helped us with that and really driven that. Those 3 things just happen to correspond with our strategy because we have been executing against that for a few years now. Number one, we've had great products from Omnia to Nexia that has helped fuel this growth, but it wasn't just that. We have also been executing really well, working really closely with our partners, integrating more with them, sharing more with them, collaborating more with them, a huge part of what drives our growth. And then I think the third thing that's been really, really key for us is we have had a relentless focus on quality and reliability so that we can be a really great partner to our customers. So you'll hear me talk a lot today also about focus. I think that's also really important for us as a company is focusing in on what matters the most. And so one of the things that I spend a lot of time about around is when we go to different markets, we look at where our market share is across the globe, are we higher or lower? And then let's think about those. And there's 3 areas where we really want to push. One is what's big, what's growing and what's profitable. Number one, how can we do more in markets like that. That's like the U.S. We have had a big focus on the U.S. over the last several years and we are really growing in the U.S., and that's a big part of where we want to continue to grow. Number two is we need to ensure that we drive profitability. Peter talked about value creation. In areas that are growing within the hearing aid space. One of those areas is key accounts, managed care. That's going to continue to grow over the next many years, and it's how can we work together to ensure that both their margins and our margins are where they need to be. And then number three is we want to grow more in areas that are already profitable. And so an example of that is Japan. We want to increase share in markets like Japan that are profitable today and where we see that we have some opportunity to have further growth within them. And then I think the second thing for me and what I spend a lot of time on and how I really drive the business is the intersection of these markets and then channels. And so there are roughly 5 big buckets of channel segments within the hearing aid space. There are subsegments within these. And when I travel around to the different countries and when I talk to the different markets, we then take this down to how many POS are in each of these channels, how many hearing aids are being sold through those? What does the ASP look like? What's the product mix within them? What's the key need that these have because it varies a little bit between channels, and that's how we're driving the business moving forward. That's the conversations that we have internally. So when you think about what are the needs around these and what's happening within these different channels, the biggest channel in the market is the open market. So these are the mom-and-pop shops. That has been the biggest channel for a really long time. It will continue to be the biggest channel for quite some time. Now that channel has been on the decline, but it's a long, slow decline. I have been saying that now for 16, 17 years. The growth that you see now in that channel is HBMs. So HBMs managed care companies in the U.S., you guys know that? Yes. So they are helping fuel the overall global growth within this, providing more access to customers in the U.S., big growth that's driving this across all the open market globally. The biggest thing that we can do within this, the biggest need that they have is us providing support to them. How can we be a great partner because they're a mom-and-pop, they are a small business, what are the things that we can do to help them compete against these other channels. The second and third channels, which have between 20% and 25% market share each and are similar in a lot of ways are the chains and the government entities. And the biggest thing that's most important for chains is efficiency. They have a lot of CapEx. They have a lot of expenses that they have within their business. The most important thing that we can do for them is really being efficient within our processes. On the government side, they are so super busy. If you ever go to an NHS clinic or to a VA clinic or to a Hearing Australia, they are super busy. The most important thing we need to do as a company is be reliable, that we -- when we say a product is going to arrive, it arrives. When we say it's going to arrive with what's supposed to be in the box when it's supposed to arrive. It sounds so simple, right, that is really hard to do, especially when you're doing a product every second. With that, is one of the most important things that we can deliver there. The 4 channel -- and it's interesting because this is one that I get so many questions on is around manufactured owned retail and networks. So in the marketplace, the manufactured owned is about 80% of that. So 10% to 12% of the overall marketplace. That means 90% of the market is open and available to us as GN since we have decided, as Peter said, and as a long-term part of GN strategy that we do not vertically integrate. But notice the 20% on this Page too. We are super active in participating in retail consolidation. We just do it via our partners. We work within our partners within the marketplace to look at opportunities that exist, and they drive that consolidation for us. They are our partners within it. They are the ones with the local knowledge, the local expertise, knowing who the great fitters are within that space, knowing where to advertise, we just do that via our partners. And that's been our strategy for a while, and it's going to continue to be one that we lean more and more into going forward. And then the last channel that is really small, growing really fast is the online space, as more seniors become more comfortable with technology and getting health care delivered online. It's going to continue to be a smaller space, but it's definitely part of the future. When I look at NPS scores and satisfaction levels, really high for people that are getting service online. It's super convenient for them, but it's still a really small part of the marketplace today. So one of the things that went across every channel was around technology. And I think the thing for us as a company is thinking about how do we really drive customer-centric innovation. I think it's one of the biggest, biggest differences at GN and where we're focused. So a couple of years ago, we did a study. Over 1,000 end users across the globe, both first-time users, people looking for hearing aids as well as experienced users that are used to -- that have been wearing hearing needs for several years. And we spent a lot of time really getting to know these folks. And understanding what is important to them at different parts of the user journey. This is what drives our product road map. It drives R&D. It drives our marketing and communication, super important for us. I could spend hours on this page with you guys, but they wouldn't give me that today. So -- and I know you guys want to hear it, too. But I'll talk about 3 things on here that I think are interesting. Number one thing, sound quality, number one most important thing for a new user I am looking for a hearing aid because I want to hear. Are you surprised by that? No, right? We often forget that in our industry because we get so caught up in technology and so caught up in innovation. The number one thing people want to be able to hear and specifically, they want to be able to hear a noise, number one and most important thing for a new user, guess what? For an experience user, "Oh, I want to continue to hear, right? I want to continue to have a great experience. So when they're looking for their replacement hearing aid, the number one thing they're asking about. Hearing a noise, once again, the number one thing, cross research. You guys can look white paper after white paper. Number one problem that people have hearing a noise. Guess what? Omnia and Nexia the best hearing aids in the market for hearing a noise. Research after research, we just finished just yesterday, I saw results comparing against some new products, Nexia still drives, number one, hearing a noise. It's a core philosophy that we have had and a core problem that we knew end users have had that we wanted to solve for. Second thing I'll mention on this page. When folks say, okay, I need a hearing aid of having trouble hearing and noise. When a new user goes to Google, what do they search for. I want an invisible hearing aid, I want a small hearing aid, I want to discrete hearing aid, number one thing they're looking for. I don't want anybody to know, right? I got a problem. I'm tired of people complaining about it. I'm ready to take action, but I still want to keep it hidden. Number one thing they search for. So what did we do? What have we done as a company? We have miniaturized. We have the smallest Rechargeable RIE in the marketplace. When you see this product and put it in the hand, our customers sell products in the hand, smallest in the industry. I encourage you guys to go look at it. But the second thing around this becomes -- once you're used to wearing a hearing aid, you don't care anymore, right? Everybody knows it doesn't matter. But the second thing that's great about Nexia and that small RIE is we spend a ton of time thinking about the center of gravity on that and the width of that product. So if it's super comfortably on your ear, the weight is right, the tension is right on it. So number two, comfort, super, super important for people that are experienced to users, Nexia fits great within that space. And then the third thing I want to mention is around connectivity. If you are a new user never, does it enter your mind that, "Oh, does it work with my smartphone? Does it work with the loop system? Is it going to connect to a remote mic? Not in the vocabulary at all. Over time, that becomes super important to people. I encourage you guys to go outside today, listen to when I talk about hearing and noise, we've got demonstrations of that, you can hear it. Number 2 is loop systems, telecoils, so many buildings are equipped with that today, super complicated to do. Auracast is shocking the sound quality difference, shocking the difference between, and we have a demonstration out there, you can listen to. I have to admit it had been 10 years since I had listened to an FM system, long time. When we launched this, Peter and I were visiting Australia recently, we were at NAL. They had a full demonstration set up between a loop system and Auracast, shocking difference. I invite you guys to go look at that because it's the future for hearing aid connectivity, but it's also the future of all of our connectivity, all of us will be using this at some point in the future. The other thing I wanted to share is -- how do we take this innovation and then think about it, core to GN is organic hearing. And I know a lot of people talk about natural or different elements of this. GN is different in how we process sound. GN is different in how we think about? How the end users processes hearing information. And it goes back to the core. Do you guys know the first white paper that ReSound ever wrote? What it was titled? If not nature, then ReSound, first white paper. Long, long history for us. Number two, just think about some of these innovations that Peter shared, ReSound the air. First one where you didn't feel included or like you were talking in a bottle, that is very much more natural. It's how we all experience the world. Think about Made for iPhone. Before people had to wear a loop system. I mean this is so annoying me today wearing this. you have to wear this all the time if you wanted to use your phones something like this, you had to wear this all the time if you wanted to use your phone, something like this. Plus, it was heavy, whenever it's up against your body. We made every -- we enabled hearing aid users to use their smartphones like everyone else. We launched M&RIE, the microphone and receiver in the ear. That allowed -- and that is the only -- we're the only company that has that technology and it allows people to localize, to understand where sounds are coming from because we're using the pinnae. We're using their natural years, just like you would hear naturally. And then probably the -- last thing that I would say that I think really makes GN different from a technology standpoint is how we use omnidirectional mode and directional mode because we use those simultaneously and then we let the processing power of our brains. We enable you, not this, to make those decisions to hear. And what do I mean specifically around that? We'll be outside and it's all loud and there's tons of noise with everybody talking. You can swelter. you can naturally in your brain, take down the volume of everything else and focus on whatever speaker you want to listen. And you can also do that even if you're in this direction, and you hear someone from this side, you know that's who you want to hear. You can still pick up on that. Your brain naturally does that. We, as GN are not making the hearing aid decide that for you. We are giving you bring that information and letting you process it, really different and really core to our philosophy around our technology and where we head with it. Nexia has the full platform. All products are launched, really exciting as we go into the VA, just -- that launch just started a few days ago, first time a full portfolio we have done. And I started off talking about we have all these passionate people within GN. I'm going to have a guy named Dr. Miguel now, share with you guys 5 things about Nexia that he really loves and he has a great style about him that really simplifies this for the messaging for both HCPs as well as end users. So here are 5 things about Nexia that Dr. Miguel loves. [Presentation]

Part of the Nexia campaign is and dot dot dot. So I want to get to do my dot dot dots now if that's okay. Two other things I just have to mention why I think we're having success with Nexia and what's really great. One is, as part of Nexia in the fitting software, we also included a first-time user program. I mentioned that hearing and noise is the most important thing. So we at GN, have always increased audibility because we wanted people to hear a noise. But a lot of times, if it's your first time, you're not used to hearing those sounds, and it's really uncomfortable. So instead, we've balanced that now. We've given more comfort. We've given an acclimation period for you during that. The second thing is that has also been really helpful as we've moved competitive users over to wearing Nexia because it gives them more comfort as they make that transition to our sound quality. The second thing I want to mention, and I said that hearing was personal. I deal with single-sided deafness at home. We did not have a product there. We have launched a wireless cross and by cross now. It is the best CROS/BiCROS in this marketplace. It has the longest battery life. This has opened doors for us. This is enabling us to be on the offensive where before we had to defend when people came in to talk about CROS/BiCROS system. And by the way, when I talk about being customer-centric, when you get feedback on hearing aids at breakfast or dinner, you really start to know your products and what's working and what's not. The other thing, how is Nexia going? I just have an example here of the U.S. commercial market. I didn't pick it because it's the best. I picked it because it was the longest in the marketplace to show how it's really doing. Three things that we track and monitor really, really closely. How many people are fitting our devices, right? We've had a 5% growth in our POS. And then within our existing accounts and those accounts, are they doing more with us, how many units per POS again, over a 5% growth. And then the last thing that you really want to do within a launch is drive your ASP and we've seen a significant increase in ASP because people, one, is we had a price increase associated with Nexia, but two, people have traded up to the higher technology level to get these great benefits. And we see this in markets across the globe. The other thing is you may say, hay Scott, what's next? I think there's a couple of things. One is for me in hearing, we are an innovation company, we are an innovation industry. And there is a rhythm associated with this industry, spring and fall that was normally associated with the trade shows. So AAA and OHA when people will make announcements, it's now more closely tied to VA windows. Having these regular cadence, having what we call a heartbeat rhythm, super, super important because our customers are looking, they have patients coming in. What's new? What's different? They need something to talk about. Our reps need to be able to share that as well. We have a very good rhythm to make sure that we are hitting these windows every year and sharing this information. Now it could be things around the fitting experience, partner experiences, connectivity, but always, always a focus on hearing a noise. So let's talk about being a trusted partner for a minute now. HCPs never buy a hearing aid. That's not what they're looking for. They're looking for the support that comes with that. It really does not matter how great a hearing aid is if you don't have this level of support. When I do presentations internally, this is always the page that I share, always part of my presentation. If you are ever confused at GN hearing of what to work on, something on this page that will move the needle with our customers. Across the base, you have to be reliable, you have to drive quality. Number 2 is innovation. And I would also argue that this is not onetime innovation, you cannot be a one-hit wonder. That's the reason we own this trend now because we've had Omnia, we have Nexia and we got to continue that moving forward with continuous innovation. Customers don't like to change between fitting software as it's like, do you like changing between an iPhone and Android. It's just hard. Yes, you can do it, but it's just hard. Customers want to see that continuous innovation. We have to deliver that. But then as you move up, you've got to be super easy to do business with. And then if you've done those, you get to really start providing the support to help them think about how can I grow my business, how can I take more market share? What can I do? Then you've really earned that spot as their trusted adviser. So I'm going to share with you guys, 7 examples of partnerships, and I promise I'll be a little quick through these. Just so you get a flavor of what I mean when we talk about partner and different things that we are doing. Many of you were at Capital Market Day a few years ago, I talked about ReSound Accelerate. We were just launching it in the U.S. We have since rolled it out in the test market in Asia. We rolled it in a test market as well in Europe. This is way more than a loyalty program. This is everything you need to run your small business. So we've combined our purchasing power with their purchasing power. They get up to 80% off at places like Staples and Office Depot for everyday office supplies, also clinical supplies, office equipment, office furniture, HR support, marketing support, social media support, insurance support, every single thing you can think about that you would need as a small business, we're helping them do. We are their partner within that. And we talk about that as an engagement program because it's much more than just a loyalty program. And I'm going to share a video with you guys about one of our programs that we have as part of this. It's called the Gift of Hearing. Every year around the holidays, we've been running this in the U.S. for the last 3 or 4 years. It normally corresponds with launch. So it's a great way to get our products out there. But when we talk about daring our customers to do something different when we talk, when we talk about daring our customers to really position themselves in their marketplace, daring our customers to do things like go on TV, this is part of that. [Presentation]

Fantastic program you guys and one of my favorite parts of the year. You also get a good snippet, I think, from that of who our customers really are. I mean they are small business owners. They need this help. They need that support. I mentioned earlier, too, about our retail partners, and this is how we participate within consolidation. It is really about working hand in hand if we know of people who may be looking to retire or wanting to transition their practices, that's where we work together with others within the marketplace that are wanting to grow, that are wanting to expand. We have that rolling out across the globe in different markets. Specifically, we have been doing this for the last several years with Beltone in the U.S. We have Beltone owners that have 50 locations, 75 locations, 100 locations, 200 locations, right? And they're looking to grow. And these are multigenerational practices. We're working -- we have the example on the page here, 4 generations, right? They have been with built on a really long time. This is a family business. This will continue to be a family business for many, many years. That's how we participate in retail consolidation. The second thing is really being a partner with key accounts. We are now working with, I think, every major key account across the globe. And we're doing that in ways that are both good for their business and good for our business. And you see some new names here in Australia, we had started working with last year, a big part of fueling our growth, work very closely with Costco, with the VA, with the NHS with all the managed care companies in the U.S. But there's also a new one here, spec savers. Just this month, we announced that we're working more closely with Specsavers as well. So really, this is a growth part of the marketplace and one where we really want to work together with our partners. Another area that has really been a big part of our growth, too, and will continue to be is within emerging markets. And we've created a model within emerging markets, where I know we're in Ballerup today, and it feels like center of the world. But there's -- this local know-how, this local knowledge is so important when you think about regulatory requirements, homologation, who are the key players in the market? Where do you want to advertise? Who are the ACPs we want to recruit? We have created a model that is really helping our business grow within these. Continue to be a big part of our future. I have not spent much time today on Jabra hearing, former Lively. Maybe I'll make a couple of comments on them. One is they are continuing to execute according to their business plan. They were tailwinds for us as part of our Q1. Their business will continue to primarily be DTC, direct to consumer. We are committed. That team is committed to getting to breakeven by the end of '25, beginning of '26, and they're doing really well. They have transitioned the brand from Lively to Jabra hearing. They have transitioned from prescription grade to OTC and they've done that while continuing to grow. The second thing is the team is also working with mass merchants, right? And so these are people like Best Buy and Walmart and Amazon in seeing if seniors want to buy their hearing aids in those types of locations. I don't know the answer to that yet. Right? I think it's still early days in some of those channels. So we'll see. But when we look at that online channel, specifically earlier, that we do see continuing to grow. Another partnership that is super important for us as a company is our relationship with Cochlear. And as part of the smart hearing alliance, this allows us to play on the really upper end of hearing health care. These are people that have really severe hearing loss and having a bimodal solution that works with them. So cochlear implant on one side, hearing aid on the other really pushes us as a company as well. But alliances like this go even broader. Being part of GN, we also get earlier access to companies like Microsoft. So I talked about Auracast, by having that relationship now, hearing aids can connect directly to your laptop. And that's really cool because many seniors are working longer now. Many people that are hearing impaired really struggle dealing with teams, now we have a direct connectivity to the laptops. Relationships like with Android so that we were able to actually push this even sooner, which also enabled us to work more with Samsung. Apple over many, many years, key part of what we do, and I think it also helps our R&D engine. People often ask like, "Oh, Scott, you know what, you are spending enough in R&D? We get to punch above our weight because we have a lot of these relationships." And then last, I want to mention a new partnership that we just launched last week, end of April. And this is what we call above brand, and it really centers around cognitive health. So mild cognitive decline, early onset of dementia. So the link between hearing and those 2, very much a topic that is on people's minds these days. And we've take an approach that we want to be very scientific within our data that's shared, creating an information hub around it, but also working where it's not just GN. We think this needs to be much broader. So working with KOLs, researchers, nonprofit entities, government entities, hospital systems other players within the hearing space and other companies that are also working on therapeutics around dementia in their early onset of -- or mild cognitive impairment in Alzheimer's. We have a booth set up outside. I encourage you guys to take a look at it. It's gotten a lot of traction over the last week. I want to spend just a couple of minutes on what we mean when we talk about modernizing to really drive effectiveness and efficiency. Number one, quality, best thing I can do for end users, customers internally and you guys is making sure we have fantastic quality. We have had a huge focus on this UC from every one of our launches, how much we have improved with each of those. Key, key, key for us moving forward. This makes us a reliable partner. Number two is we are on a multiyear journey to improve our IT infrastructure to create this digital backbone, we have many legacy systems today. That makes it really hard for us to get the scale that we want to do. Stefan is going to talk later today about all these internal efficiencies that we can do. And then in turn, it also will enable us on the commercial side to also be an easier partner to do business with. And that's part of that pyramid of where we want to be on the upper end of that. And then as I mentioned, Stefan is going to share a bit more on what we also want to do from a supply chain perspective. Being part of GN gives us a tremendous amount of scale when we think about our distribution. It's also something that we're spending a tremendous amount of time is how do we design not just for the innovation, but also for manufacturing and also for the overall supply chain. And then finally is how do we start to automate our facilities? We have a lot of folks that are doing manual things. How can we help them? How can we enable them with more technology? So 4 things to take away from today. One, it's a great market, continuing to grow, been growing for a long time, resilient, high entry barriers. We are an innovation company, and we innovate based on customer needs. We are creating great partnerships. We're going to continue to do that. And then we're also going to make sure that we're driving our effectiveness and efficiency within the marketplace. I started out sharing that hearing is personal. I mentioned about single-sided deafness. There's also another side of that story. So I'm going to share a video that we launched with Listen to This. It's a bit about my story in hearing, but it's also, I think, our employees story. I think it's our customer stories of what we love about this industry? What we want to do? I think it's a story about end users. And I hope that you guys as shareholders within GN view this a bit as your story as well. [Presentation]

Thanks, guys. Thank you, Scott. And Peter and Soren will join the stage. I had one job for today. That was control the agenda and the timing.

I'm sorry.

Thank you, Scott, you just proved that already. We will have 15 minutes-ish of Q&As right now. Scott will be around all day. He'll also be at the dinner tonight, for those of you participating, so we can also take questions there. [Operator Instructions]. And I think it was Veronika who rose first hand in here.

Amazing. And Scott, thank you for the presentation. Three ones, I will promise there quick. One, obviously, unusual for you to be launching all of the entire portfolio into the VA. Just curious what your expectations are for the market share momentum that you can hope to achieve there? And longer term, what do you think is yours is a realistic VA market share target for you? Can it be the 17 that you have everywhere else? Or do we need to adjust that in one way or another. Second, can you talk about your exposure to managed care in the U.S. and whether you're over or under indexed relative to your broader market share and maybe some of the opportunities that might be emerging in the market from the decisions that some of your competitors have taken? And my final question is just congrats on the Specsavers expansion. Just maybe talk to us a little bit about the margin profile of a business like that or Costco and how that feeds through to the P&L, both from a gross margin and EBIT margin perspective?

So maybe the first one, VA, super excited for the launch of the VA. Many Americans get super excited. We have such respect for our veterans. And I think we have many veterans on our team as well. Nexia has a great product, and we're really excited to deliver that to the marketplace. We have a plan in place for Nexia that enables to get to our guidance for this year. And we are currently executing against that. The initial days of the rollout have been in line with our expectations on it. So that's very much a part of our plan to hit our guidance for the year. And so we're going to continue to move towards that. We're a growth company. We want to continue to grow. VA is a big channel. We want to continue to take share there as well over time. Number two, on managed care. I think we are indexed basically relative to the marketplace, right in line with that. And our philosophy on managed care is our customers have different opinions on it. And we want to leave that to you and your individual market. This morning, I have breakfast with one of our customers that's here this week. And we talked about managed care. And in his local marketplace, it's a community that has many people that are -- have had manufacturing jobs, right? And they have these benefits through these managed care companies. If he didn't work with them, he would have no business really. And so it's really up to each of our customers to decide how that fits within their practice, how they want to run their practice, how they want their business model to be? And we're letting them make that decision as they move forward with it because it's really important for a lot of customers, really important for a lot of their business. And then I think on the Specsavers side, we have worked really closely as we work with all of our key accounts. How do we get a margin profile that's going to be work for them and how is it going to be a margin profile that can work for us? We have a commitment this year, the guidance that we have given, and this was part of our plan within that guidance as well.

Maybe this is better. So maybe I can just add on the question on margin profile of this business. It probably got both managed care and the Specsavers and the like. I mean we're, of course, conscious about the different channels have different kind of margin profiles, but they also have different kind of cost profiles. So we're taking a holistic decision. We like to make good business decisions, of course. So we will not say yes to everyone and anything. But you should assume that the things we do support value creation for the company. And we, of course, have good decision meetings around these bigger opportunities.

I think what -- Oliver next.

It's a Oliver Metzger from ODDO BHF. Two questions. The first one is about merging complexity. So you mentioned that more people work in a horizontal way instead of a vertical organization. So I assume that really there's a lot of complexities. So how do you prevent that people move in the wrong direction? Second question is about OTC because I was a little bit surprised to see OTC as big opportunity. I understand from a breakeven perspective or cash flow perspective, that makes sense. But over the last years, it has remained a small niche. Can you share with us your view why you really mentioned this point?

Maybe this relates a bit to my opening. I promise to answer your question, but I propose to do it towards the end of the presentation because you will have presentations from both our innovation people, R&D, as well as our operations team where you hopefully will understand and appreciate a bit more how we work because if we look on these employees, the majority was sitting in those 2 organizations. So I propose let's have those and then come back and answer the question, which is of course, very relevant. On OTC, and here you can lean in an help, of course, Scott, I mean we are in an investment phase in OTC. It's been growing very nicely, and it is supportive growth in some way, certain of a hearing and also the company. But it's also a buildup phase where we are investing and the customer acquisition, in particular, is putting a little bit of a burden on the financials. So my call out in the beginning was more that, that dynamic is okay, but it cannot stay forever. We need to make sure that we are turning this into what is now a meaningful business over the coming periods and is something that's also a profitable business and also supporting cash flow. So we are very committed to our OTC business, and we still believe what we do makes sense. It's more to call out to all of you that we're well aware of the profitability dynamics and it's important for us to get that right.

Maybe I'll just add one thing on the OTC side. It's -- I think one of the intentions I think that the FDA also had was regulating the PSAP market. And so I think when we think about OTC and when we see what's happened within OTC, there are 0.5 million to 1 million PSAPs being sold in the U.S. That has mostly moved over to OTC now, and that has now become regulated. And so when I think when we think about that marketplace, that's what we see within it.

Yes. Just a question on -- you comment a little about the market growth measured in value, and then you -- I don't know if the coincidence, you talk about market share development measured in volumes instead. So maybe I think that going forward, I guess that you aspire to grow above the market measured in value. So could you talk about how your development in value of market share has been because I struggle to see that it's -- back its peak yet? And then how you expect to see the split between volume and value on ASP in U.S. operations going forward because it has a cost to do partnerships, I guess, on the pricing?

The -- so I think we think about things a little bit on the volume side because we have actual data on that. We know those numbers, right? When it goes to the side, you've got to make some assumptions of where other folks are. That data is just not available within the marketplace. I think our trend has continued. I mean, Omnia and Nexia, we have been able to drive our ASP up because of the launch of those products. So I think that has helped us as well from the value side. So I think it looks similar when we look at it from a value share as well.

And then just back to the Specsavers question because remember, you pulled out a couple of years back. And as I recall it, it was just both due to pricing and also due to a risk of diluting the ReSound brand. What have changed. Are you using the same brand? What are you doing with Specsavers?

Yes. We actually have a different brand that we're using the Specsavers Advance brand within Specsavers now. So that's one of the topics that we had before was how do we ensure not that dilution of the ReSound brand within.

I think we can take one more question. Otherwise, you'll not get lunch. We can also continue for 15 minutes, but let's have one final question from Christian, and then there will be lunch afterwards.

Thank I'll do 2 questions, so apologies for the delay. Christian Ryom from Danske Bank. So first, actually, a quick one just to follow up on Martin's question. So can you confirm that your ASP development has been positive since 2019? That's the first question. And then the second question is your vision for the Beltone network. So is the strategic development there, is that really driven by the individual dealership owners? Or do you have, say, an overarching strategy? Because if I understand your slide where you show the different market segments, correct? I would assume the Beltone is in what you call the open market and therefore, this declining market, excluding managed care. So how are you approaching that and ensuring that Beltone can thrive?

I don't know how much we talked about ASP. So I think it depends on channel. I think there are definitely been price pressure over that time. The growth of managed care as an example, for sure, is putting some price pressure overall. That's the reason we've had to really drive our unit share gains quite a bit as well. On the second side...

The Beltone?

On the Beltone side, we are working very closely with -- we have a lot of new Beltone partners as well as some younger owners when I to talk about those multigenerational that are really wanting to grow and expand that business. And so it is very -- we work very closely with him. I have spent a lot of time with our Beltone owners, and it is really together that we have to work. But that's part of our plan and our future for moving forward. I think it makes a really big difference when they bring that local market knowledge to bear.

Let me just make a comment related to ASP as well. I mean it is strategically very important for us to make sure we have healthy margins. I said it in the opening also. So if you take a longer period of time, I mean, over a few quarters and so that mean we are very committed to drive margin expansion. And then the other thing, building upon what Scott said that when it's more the channel mix driving a difference today ASP, we are more okay with that because in some periods, some channels might grow much faster than others. In other periods, it might bounce back and so. But then we are very disciplined within the channels to make sure we are holding our ground and asking us for, what does good look like, so to say. So just like you all to leave with the impression that pricing discipline and care about pricing and ASP is something that's very high on the agenda.

And then we have a short break. So there will be food outside. We only have 15 minutes. Thank you for that, Scott. But we have 15 minutes now for a short bio break. There will be a longer break later in the day. We'll meet up in here at 1:45. [Break]

Welcome back from the short break. I know it was too short, but we'll hopefully get a longer break later on the day. It depends on how many questions you will have. So I was just refraining from that. The next session is where we'll deep dive more into the divisions. We'll start with the Enterprise division. So happy to hand over to Calum.

Thank you, Rune, and good afternoon, everybody. My name is Calum MacDougall. I'm responsible for the Enterprise division here at GN. I spent the last 20 years in my career in technology and the consumerization of technology and the last 9 years here at GN. When I first walked through that door that you all walked through today back in 2015, one of the first questions people ask me is why are you here? Why did you choose GN? The answer I gave is that I believe this company is the future, that the ideas and the technology in this building could fundamentally change the way that people live and work. And in many ways, my presentation today will be about the realization of that future, that future that actually came to be. I'm going to talk about that in 3 parts. We're going to start talking about what is the enterprise market. When I started working here, we primarily sold contact center devices. It's a completely different market dynamic right now. What is the market? How do we expect growth in the future? Next, we're going to talk about how do we win? What are the unique advantages that we have here at GN. How did we become the world's leading professional audio brand? And how do we intend to maintain that position. And finally, we take a look at the new type of the future [Audio Gap] Is that clearer? -- let's carry on like that in the old-fashioned way. So let's start by talking about the enterprise market. What is the enterprise market for GN. We're here to make work better for businesses and professionals. And we do that by selling all premium audio and video solutions to enterprises of all sizes under the Jabra brand. So 2 key words I want to pick up on in that opening sentence. Firstly is Jabra. Up until now, I've talked about GN, but the reality is in the Enterprise Division, our customers are asking for Jabra, trust Jabra and expect to see Jabra. That's the brand that they know and love. So from now on, I'm going to talk about Jabra in the context of the Enterprise division. The second keyword I want to explain a little bit more is solutions. When you get a Jabra product or a Jabra headset, you take it out of the box, it looks great. It's premium design. You feel like you've got a piece of hardware, valuable hardware, but you haven't. You've got so much more than that because inside that hardware, there's embedded software that enhances the performance. Beyond that hardware, you've got software at an application layer that enables us to manage the devices and optimize the devices. And even beyond that, you've got a software live from our partners, Microsoft, Zoom and Google where you connect the device in to unlock the full experience. I said we sell audio and video solutions, but I guess that's kind of not really true either because the value we really offer is improved productivity, improved performance, improved efficiency for enterprises who can unlock the value of their software investments by choosing the right devices to connect to them from Jabra. So what categories do we operate in? First, these professional headsets. We are the market leaders in professional headsets. We have 50% value share, 33% volume share. We sold 25 headsets every minute last year. We're the market leaders in personal speaker phones with the Jabra Speak range. There's round about 9 million Jabra Speaks out in the world from Sydney to Sao Paulo and everywhere in between, in boardrooms, in personal meeting rooms in brief cases. In video, we're not the market leaders, but we believe we're the leaders in the experience in meeting quality and engagement. We're going to come back to that a little bit later and explain exactly what we mean. As a part of our offering is a solution. Our products connect to something, and they usually connect to a UC or a software platform that our enterprise customers have bought, and they usually buy it for Microsoft, Google or Zoom. So we need to make sure our products are optimized and certified for those platforms, so our buyers know they can work with the software platform they've chosen. Where do our buyers sit? Upwards of 80% of Fortune 100 companies choose Jabra, but our customers are not just large enterprises. We have an extended channel network, our extended sales army of 20,000 resellers who transact our products every year and reach a long tail of small and medium-sized enterprises. So that's a quick overview of our business, the Jabra Enterprise division. And throughout that overview, I've spoken about enterprise-grade audio and video. So I should probably explain exactly what I mean by it. What is enterprise grade. The first way to categorize it is by who buys it? Enterprise grade products are bought by IT decision-makers in enterprises of all sizes. They could be like my colleague Anne, who controls or owns a rather large budgets around cost global sites or they can be somebody in a small or medium-sized enterprise, his main job is perhaps office manager, but is also buying the IT. With apologies to my wife who might actually be watching, these decision makers are the most important people in my life. We need to understand what their needs and pains and wants are so we can deliver solutions to them. The thing that is most important for them in the beginning is that the choices they make on headsets and video is optimized and certified for the software solutions they've chosen. If you've chosen to deploy Microsoft Teams, you really want to make sure that your video and audio solutions are certified for that platform. So number one, certification for the software platform of your choice. Okay, what next? Imagine I've got 300 or maybe 3,000 people I need to get devices to, I need something that's easy to deploy. That can easily get out into my company and then it's easy to manage. What if I have 100-odd meeting rooms, I don't want to have to get to each meeting room to update the software. So I need a system and application level software, system of device management to enable it to manage deployment. Then once my headsets and video solutions are out there, I would rather they work. I don't want people coming with IT tickets talking about complaints or issues with the hardware or that my rooms are down. So I need something that's durable and reliable. I also need something to secure if I'm deploying it globally. But things will happen, I will need to replace products, new people will join the company. So I also need something that's faster ship and fast to service and that doesn't matter whether the office is in Copenhagen or Canberra, I've got a global budget, I need the product to arrive on time. And if it's a headset, I expect people to use it all the day, so I needed to be comfortable. So this created a different type of category, enterprise-grade audio and video, some distinct and unique attributes. If we were to all leave this room today and go to the nearest Elgiganten, for those of you online, that's a big consumer electronics store in Denmark. It will be challenging for us to find very many products that meet this criteria. So it's very specific category. So within this category of enterprise grade audio and video, what do we sell? What is our product mix and to whom do we sell it. So let's look at the breakdown of our enterprise revenue looking at last year. So the first thing to see here is over 3/4 of our revenue comes from enterprise grade headsets and enterprise-grade headsets are broken into 3 parts. The frontline worker, which is a small sliver of the pie chart, the knowledge worker, that's the majority of our revenue and then call centric. I'm going to speak a little bit more detail about each of those categories on my next slide. But for now, I want to talk a little bit about call-centric. So for call-centric, these are products primarily engineered for the contact center -- for contact center agents. And as we'll talk about in a moment, contact center agents are declining. But not all the products we make with contact center characteristics, let's say, characteristics of durability, great voice pickup, comfort and battery life end up in a contact center. Some of those attributes are valuable elsewhere, for example, the trading floor in the bank. So when we talk about our call-centric category, that's not 1 for 1 with the contact center. Many of those products end up in intensive call-centric environments. If we look at our industry mix on the right-hand side, perhaps not surprisingly, it's pretty diverse. Why do I say not surprisingly because there is a broad adoption of unified communication platforms across multiple industries. We believe 90% of knowledge workers can connect to unified communication platform. They work in very many different sectors. Accordingly, it's pretty logical that we would service for many different sectors as well. So that's the fly. And let's now dive into a little bit of headsets and talk specifically about those 3 headsets categories I talked about, the knowledge worker, call center and the frontline work. And let's talk about the knowledge worker, that's the biggest single category over 0.5 billion knowledge workers out in the world. Who are knowledge workers? Now that people broadly like us, people who broadly worked in an office before the pandemic and are now hybrid working. Hybrid working meaning we usually work in 3 places over the course of a normal working month, the office, home and a third place, the airport, perhaps about a lot of you worked at the airport today or tomorrow or elsewhere. Right now, over 80% of meetings are hybrid, and people like it. Over 60% of us actually prefer hybrid meetings, but we also acknowledge we need the right technology to be effective in those hybrid meetings. Over 80% of people are looking for the right technology. So in this knowledge worker segment, the primary use case is hybrid working. As Peter said, we believe hybrid working is here to stay, and we expect a moderate level of growth in that segment. You can also see here, we talk about a 20% penetration rate. We talk more about the penetration traits on the next slide and a 3-year replacement rate. Our latest data hot in this week talks about replacement rate about 2 years and 11 months, so 3 years is a good rounding point. We'll talk more about replacement and penetration in a moment. Call center agents, it's pretty difficult to work in a call center without a headset. So penetration is 100%. And we see a similar replacement rate of around 3 years, and you're using that headset for customer service. Specific call center segment is declining for reasons that I guess, are fairly straightforward. We see development of AI, which is handling some of the more basic customer inquiries. But it is not our expectation that the contact center will disappear entirely. There is still very complex customer inquiries that you need to manage on a human-to-human basis. For those complex inquiries, you need the best possible equipment and perhaps some software support as well. We'll get to that in a moment. The final category to talk about is the frontline worker. Here, we identified 4 key segments within the frontline worker hospitality, health care, transport and logistics and retail. This is a market where we see a greater potential for growth, and it follows a similar model to the growth of the knowledge worker market 10 to 15 years ago. We see beginning in growth in penetration of software clients, particularly UC clients on mobile devices, enabling frontline workers to communicate with each other and into the head or the back office. To do that, just as the knowledge worker needs a headset to work efficiently in the office, to work in a retail environment, you need a headset efficiently there. So we see a growth potential there. So if we look at this slide, we can see, I guess, fairly clearly the penetration rate and replacement rates are quite important to how we see the market developing in the future. So let's spend a little bit of time talking about what we know about penetration and replacement. And let's focus on the knowledge work. That is the biggest segments of the market. So this is where it probably makes the most sense to focus our time. Just over 0.5 billion knowledge workers. So the penetration rate here, we believe to be 20%. And when we talk about 20% penetration of enterprise-grade devices, the keyword is certified. Remember on the slide when we were talking about the IT decision-maker, single most important thing is, is it certifying my software platform? So this is how we describe an enterprise device in this context, is it certified. So 20% penetration of certified devices. 30% penetration of consumer devices, and that is a pretty broad category, anything from AirPods all the way to a cheap wired product with a boom arm, essentially any headset that is not certified falls in the consumer category. And then the biggest category have is actually what we describe as nonuse, people who are using a UC clients, but don't use any device. They're simply talking into their PC. So if this is the situation today, what are the drivers that can affect replacement rate or penetration rate. The strongest impact is actually macroeconomic and by which I mean the factors that affect businesses' ability to invest and grow. When we speak to IT decision makers, the #1 factor in whether they will deploy more or less headsets of video around do we have loads of new employees? Are we reequipping our offices? Are we moving offices? Those are key drivers, of course, strongly linked to overall business growth. The second key driver are new technologies. So just under 40%, 38% of decision-makers tell us a new technology can accelerate their decision to replace or encourage them to enter the professional headset category. And that new technology does not necessarily need to be on the headset itself. It can be a software investment they've made, the value of which is best unlocked by having the right end point of device. Again, very similar to how the knowledge worker market developed. Enterprises investing in unified communications and acknowledging they need the right headsets and audio equipment to unlock the value. So if we think what our conclusions are here around penetration and replacement, we add in the global megatrends that Peter talked about, the normalization of hybrid work, the advancement of technology and particularly drive sustainability. We get to this view of the enterprise headset market, which is a CAGR of 3% to 5% between 24% and 28%. And of course, there is some mix in there. For the knowledge worker, we do see there will be a limited increase in penetration from this 20% level. Frontline workers with a greater deployment of software clients, we expect a more stronger increase in penetration, but of course, somewhat offset by a decline in call center agents. ASP, we anticipate to be relatively stable in this period, but that does not mean there won't be price pressure. There will be price pressure in individual segments likely in the low end, but we believe this will be offset by innovation, delivering value to enterprises. So if this is our overall view of the market, what specific opportunities are presented to us at Jabra to be able to grow. Again, I'm going to take category by category. We go through knowledge worker, call-center worker and the frontline. Let's start with the biggest market, the knowledge workers. What are our opportunities to grow? So I said in the beginning, we have around about 50% value share in the market, but near 30%, 33% volume share. That means around about 7 out of 10 heads do not have a Jabra professional headset on, they have something else on. And that's something else is usually a relatively cheaper corded device. And that presents an opportunity for us. It presents an opportunity for us to demonstrate the value to step up to the wireless segment, step up in new technology, that key driver of purchase and choose a wireless device. The wireless segment is our strongest segment. It is also currently the best-performing segment in the market. So it gives us a strong opportunity to grow and a technological reason to upgrade. We said new technologies are a good reason to step up, wireless may be one, but there may be others. There may be new technologies for new use cases and in particular, generative AI. It's the first time I've said generative AI, I'm going to say it a lot in the next 20 or 25 minutes or so. Right now, the primary input into generative AI is text. If you use ChatGPT, you type something into it usually, but we all talk faster than we type. So wouldn't a better input in the future be voice -- and if your input is voice, you need the right tool, the right endpoint to be able to put into a professional headset. We're going to come back to that idea a little bit later. We have a new generation entering the workforce Generation Z perhaps and they're looking for more consumerized headsets, but perhaps don't want to wear something like this with a boom arm in the office. They're looking for something a little bit cooler, maybe without a boom arm, AirPods type form factor. So a new form factors can help us increase penetration and replacement and appeal to new audiences. And not all penetration is equal. So if we look at the 20% penetration of knowledge workers, of course, there's a higher element in North America and the mature European markets. There are geographical opportunities, in particular, we see in Middle East and Africa and India. So that's the knowledge worker segment. Let's now look at the call center segment. And here, our opportunity is actually not primarily hardware, it's primarily software. So we see a declining number of seats in the contact center, but we still see personal customer service important. And those people who actually have to speak to somebody else to resolve a problem, that problem is quite complicated, right, because AI has not been able to help you out, it becomes super important for customer service, when you actually speak to somebody, you're able to resolve the problem satisfactorily. And we have a software solution to support that called Engage AI and Engage AI is sentiment analysis. When you are a call center agents and you're on the phone with a customer, Engage AI gives you a sense of both your customer sentiment and your own sentiment. What tone are you giving off? Are you positive or not? Think about it as kind of in-call coaching for the customer center call center agents. And in our earlier proof of concepts and trials, it really measurably works. We have a 20% increase in customer satisfaction scores when people are able to modulate their tone, and we have reduced calls of 30% call length. So for those calls that will remain in the contact center, there will be of higher value, and we have a software solution to make them better and shorter. And deploying the strong software solution won't just help us in software, it will help us in hardware as well. It will create a sticky nature for our hardware in the contact center. The final category to look at is the front-line worker. And as I said before, the opportunity is very much similar to the opportunity that we took in the knowledge worker segment. We would imagine a deployment of software by large enterprises. You see clients perhaps on mobile devices to enable frontline workers to communicate, and those frontline workers to need the right headsets to be able to unlock the value of the software. What's the right headset in the frontline environment? It is something specific. It isn't something just buy off the shelf in Elgiganten. Firstly, it needs to operate and work with the software platform we've bought. It needs to be durable. It's going to get knocked around a lot. Probably you're going to need to replacement battery because more than 1 person is going to use that device. So it's device engineered for specific use cases. So that's given us a view of the enterprise-grade headset segment, how we see the market and the opportunities. Let's take a look at video now as well. And again, video, we can break into 3 segments. The first is what we described as bring your own device. So imagine you go into a meeting room, and on the wall in the meeting room, like in the picture behind me just there, there's an all-in-one video and audio bar. You bring your computer or your laptop into the meeting room, you plug the video bar in and then you dial into a meeting. That's bring your own device. The device you bring is your laptop and you plug it into the video bar in the meeting room. The middle category stand-alone systems, there you don't bring anything, just bring yourself. You come into the meeting room, all the compute power is contained within the meeting room. Usually there's a touch screen, again, as you can see behind me there, and that's how you start the meeting. It's a Microsoft Teams room or a Zoom room, go in there, tap the screen and the meeting starts. And the final category is a category that isn't video at all, which is Speak, category which I said we were market leaders in. We are speaking here because Speak in many cases, has lived in the meeting room or the boardroom and of course, increasingly now with this prevalence of hybrid working, people don't just expect audio in the meeting room, they expect video as well. So this is a category where we expect to see some decline and replacements by all-in-one video and audio bars. But in those 2 key room categories, bring your own device and stand-alone systems, we do see a significant amount of growth, and it's primarily driven by under penetration. Around you and in the break, I would encourage you to try our meeting rooms where you can try the PanaCast system. In many respects, they're statistically unusual rooms because the 3 or 4 meeting rooms around us have all got video within them. Out in the wider world, there's only 11% penetration of video solutions into meeting rooms. So 9 out of 10 meeting rooms don't have video. So what does this tell us about growth in the video category. Again, we can see the global megatrends that Peter referred to being relevant to the growth of hybrid work, cutting-edge technology advancements, in particularly sustainability in a way, video solutions are an inherited sustainable solution preventing or encouraging not to travel. Here, we see a much higher level of growth, the CAGR of 10% to 12% from 24% to 28%, and that's driven probably by 1 simple fact or 1 simple anomaly. On 1 hand, you have 80% of people in hybrid meetings where they expect both video and audio, and on the other hand, you have only 11% of rooms equipped to be able to do that. To encourage people to come back to the office and to deliver a hybrid meeting, that gap will have to close somewhat. So what I like in headsets, we explored what are our specific opportunities in Jabra in video. Let's do the same for video. Of course, under penetration is there. That's fairly straightforward. There's a growth market and ramp for us there. Our partners in Microsoft and elsewhere are driving that penetration story as well. So it's not just us encouraging people to deploy video. And again, we talk about generative AI. I'm going to come back to that in a minute. It can create new places in the video room to drive replacement and penetration. And AI can create totally new use cases for Speak as well. So our Speak category has traditionally been used to speak to other people, either one-to-one or in meetings, but we could imagine a future where that's not what Speak is for. It's your intermediation into your generative AI client. And Anne will show you an example of how that could potentially work in an audiology setting a little bit later on. But let's come back to this case around Generative AI because I want to show you a real live example. Our Jabra PanaCast 50 integrated bar is the world's first front-of-room bar that works in conjunction with Microsoft copilot, so you know who said what in a meeting. It's much easier for me to show you a video of how this works and explain it. So I'm going to show you the video of how generative AI is coming alive now in our PanaCast video products. [Presentation]

So you have 2 live use cases there. One is generative AI transcription into copilot and the other intelligent meeting spaces using AI on the Edge to note the edge of the meeting. I said that video is a better way to see than me explaining it. But actually, the best way to say it is to go and see it. We have a super enthusiastic team out there who can't wait to show you how easy this is to do. So I'd really encourage you to try it out in the break. It's all set up in the meeting rooms next door. So there, we've taken a fly into the enterprise market in both audio and video. The next thing for us to do is to try and understand a little bit what our formula for success is -- what is our unique advantage? How do we win as Jabra in this market. And we're going to start with audio. So there are 3 key pillars in our success and that has enabled us to be the world's leading professional audio brand. Firstly is customer-centric innovation, not by coincidence the same wording that Scott used. This is about understanding what are the needs and the pains of the IT decision-maker and delivering solutions that are relevant to that, relevant to the hybrid working environment that people are now working in. What is the best headset solution we can get for hybrid working for our enterprises. That's the challenge. As Peter also referred to, it's a challenge the company is finding difficult to solve alone. We need to make work in conjunction with our alliance partners because the reality is our enterprise customers are using systems in Microsoft, Zoom and Google and we need to make sure our headsets work in concert with those systems to offer the best possible experience. Okay. So far, so good. We've innovated with the customer in mind. We've integrated with Microsoft, but how do we actually get that product to the customer in the real world. We have a uniquely powerful go-to-market model where we engage with the world's largest enterprises and then work through our channel partners to get reach in the market. These are the 3 key pillars of success, we're going to dive into a little bit more. So we talked about customer-centric innovation. So what do you need when you're making a hybrid call, whether it's in the office or whether it's at home or whether you're sitting in the airport? Well, you need to be here and be heard clearly, you need to be able to sound professional. The data on the chart behind me is self-reported. It's from real-life knowledge workers in the market telling us about their experience of using just the laptop, using ear buds or using Evolve2, our very latest line of knowledge worker devices. And the numbers speak for themselves. People are getting a better hybrid working experience when they choose Evolve. But as we said in the beginning, the enterprise headset market is not just about headsets and hardware. It's also about software, it's about helping those IT decision makers manage their multiple deployments. And we're going to support that this year with the rollout of a new device management system called Jabra Plus. Jabra Plus for admins is for the IT decision maker. It's intended to be a single pane of glass, so I can sit in my office and see the software status of all the headsets in my real estate and all my meeting rooms and update them if I need to do so. That's great if I'm happy to use the Jabra Plus window, but maybe I worked for a very big company. And maybe I've got a bunch of IT deployments, and I've already got my own device management single pane of glass where I manage everything else. What I'd like to do is integrate Jabra into that, so I don't have to have multiple systems, no problem. Jabra Plus for partners is intended to do that, so we make the SDKs and APIs available so you can integrate Jabra functionality into our single pane of glass. We talked also a little bit in the megatrends about personalization, people having their own expectations. And the middle part of this chart is for knowledge worker. Jabra Plus for desktop and Jabra Plus for mobile that enables me to optimize the settings for the way I want to work. Okay. So customer-centric innovation, hardware and software, but it needs to work with something, it needs to work with the software platform that our enterprises choose. So we have a partner ecosystem that we divide into 3, and I'll start in the bottom with the integration partners. Our job is to provide the best professional audio and video solutions. It's up to you as a customer to choose whatever software platform you want. That means we need to make sure we work with everything. And at a minimum, make sure we are integrated to all the world's major software systems. But not all software platforms are equal. The reality is most people, most enterprises choosing the 3 logos at the top, Google, Microsoft and Zoom. Here, we have to make sure we are certified, integrated, develop co-innovation like the example I showed you with CoPilot and go-to-market together. Our third group of partners is the go-to-market partners. This is how we extend our reach in the markets, particularly in video, the Novo and Creston in particular. With Novo, for example, we've developed a co-branded version of PanaCast 50 to [ ThinkSmart 180 ] to help us get extended reach in the market. So we have customer-centric innovation. It comes alive in conjunction with software platforms. How does it get to the customer? That's our go-to-market model, which would describe as pull and push. So we have a dedicated high-touch sales force, and they spend their lives going around the world's biggest companies and listening, understanding their pains, their needs, their productivity challenges and trying to find the right solutions for them. That's how we have the high penetration with the Global Fortune 100. That creates pull. Then we have this broad channel network. We have an indirect model where we sell in to distributors, they sell through to resellers and that broad brand of resellers, 20,000 resellers are our extended sales force. They will speak to more IT decision makers in an hour than I will do in my lifetime, and they give us huge reach into the market. So we create pool from the large enterprises, go to the channel network and channel network creates a reach. So that's our formula for success in audio, customer-centric innovation, work with partners and go-to-market model. What would be our formula for success in video; it's actually the same. This is the way we can drive the accelerated growth Peter referred to in the beginning, customer-centric innovation, how can we make sure we provide value for our customers by innovating to create the best possible meeting experience. We can only do that by working closely with our partners and alliances. And it's the same set again. It's Google, it's Microsoft, Zoom. These are the vendors penetrating the video space. So how do we codevelop with them, and then how do we execute in the market? Well, those Fortune 100 companies buying audio products are buying video as well. The customers are the same. We have the same opportunity to reach out through the same channel network. Let's dig into each of these pillars one by one. And for customer-centric innovation, we're going to turn to Mick Jagger's Alma Mater, the London School of Economics. We gave them a PanaCast 50, and we asked them to scientifically test it. Does it really improve meeting performance? And this is what they found. [Presentation]

So the obvious question now is if the meeting quality has improved to such an extent by PanaCast 50, why was that revenue chart I showed you? Why was the video sliver show small? And the shorter answer is that experience has not yet been made available to enough meeting rooms. We very consciously built a portfolio plan starting on the Bring Your Own Device segment, the simpler plug-and-play part of the portfolio. And we now want to extend those technologies into the room systems, that's middle pillar on the slide that I showed you and into small and larger rooms, the PanaCast 50 is currently optimized from a medium-sized room. So our plan is to take that experience broader. Our immediate objective is to roll out our Jabra Plus management system and also enhance the current portfolio. What do I mean by that? If you buy a PanaCast 50 from Jabra, the promise we also make is the product is going to improve over time. The software upgrades and what we call value packs, we introduced new features and capabilities. Some of them specifically for Jabra PanaCast 50, some of them work with your new software system, whether it's Zoom or Microsoft. And the team outside can show you that again later. I promised them I would advertise their products and demos. So please try that out. So we'll roll out our device management system this year, will enhance our portfolio this year and into the future, we'll take that market-leading technology into a broader part of the market. We talked about go-to-market and the similarity between audio go-to-market and video go-to-market and here's the data to support it. So when we talk to IT decision makers, we discovered 92% of them are decision-makers for headsets and for room solutions, and that is great for us, because as the market leader in headsets, those decision-makers know us, trust us and like us for audio, why not out of video solution there. And that's reflected by the penetration we're beginning to get with some of our larger customers. Over 2/3 of our top 300 customers are now beginning to trial our video products. So we've talked about customer-centric innovation. We've talked about go-to-market. We need to talk about -- more about partnerships. I guess partly we've shown this with the integration with CoPilot on the video, but we are doing much more than that with Microsoft. Microsoft Signature rooms, this is the preferred Microsoft layout for a Teams room in a medium size, and that includes a Jabra PanaCast 50. And guess what, we have 1 here, you can try out later. It's about 10 meters from here. You have to go up the stairs and across, and we can show you the capability in that room. The final thing to talk about here is Microsoft device ecosystem platform, known by the catchy acronym MDEP. Many enterprises prefer to operate their room systems on the Android operating system. MDEP is Microsoft's version of that Android operating system that we have worked to develop with them off the Jabra PanaCast specifically. So hopefully, that gives you now a view of how we can win in audio and video. I'd just like to conclude a little bit by looking to the future, and that's going to bring us back to generative AI. So as I said before, right now, the input to generative AI is by text, mostly you type something in, but if you imagine generative AI being more assistive AI, a client or a tool that can take notes for you, maybe even help you for performance reviews, you'd like to be able to talk to them all the time. You'd like to be always on microphone so they can gather notes and feed back to you. In that way, the gateway to Generative AI, the edge of AI could become voice and it could become a microphone. If that's the case, it's quite important the microphone works because you've invested a lot in chips, in data centers, all the way up to the top of the AI stack. If your AI clients can't hear you properly, you're going to get a bunch of what they call hallucinations in AI world. So that very point of edge of the generative AI stack needs to work and the way for it to work is to get the right professional device. Here is some data on the performance of Jabra professional devices compared to ear buds and a general headset. It's not our data. It's from a partner of ours, nice in contact. They are a cloud contact center solution provider. And what they did here was take different headsets and look at transcription accuracy, when you're talking in how accurately does it transcribe. And this is a good proxy for perhaps the future generative AI. If it can transcribe well, it's probably hearing you well and the AI can respond in the right way. But if it's only hearing 60% of what you say, it's not going to be able to help you very much. So a world where generated -- the gateway to generative AI is voice, requires the right gateway at the top of the AI stack, the right gateway is a professional device, a potentially new case for professional audio. So to conclude my presentation, in the enterprise division with the Jabra brand, we are in attractive and healthy growing markets, distinct markets with high barriers to entry. For headsets, we see a CAGR of 3% to 5% in the period and in video, 10% to 12%. And as Peter said earlier, in the video category, we need to drive accelerated growth, and that does mean meaningful growth or growth that is meaningfully ahead of the market growth. How do we do that in both headsets and video? What are our key strengths? We continue to drive customer-centric innovation. People are willing to pay for value in the market if we can deliver innovation, and there is potential in the future, this is linked to generative AI. We can only achieve this by continuing to work closely with our ecosystem partners to co-develop, to co-innovate so our hardware works in sync with their software to deliver value. And once we've got customer-centric innovation linked in to our software partners, we need a powerful go-to-market model, a global go-to-market model to enable to drive our solutions into the market, where we speak directly to and listen with the world's biggest enterprises, but we also have a powerful channel network to drive reach. So I hope that's given you a good view of how the enterprise market operates, our strengths and the potential future. And with that, I think I'm going to invite Rune, Peter and Soren on stage and we'll go for a Q&A. I'm sorry about the time, Rune, I did promise to make time up and I've done the reverse.

You did not do a good job. That's how it is. We have sort of 10 minutes for Q&A. Let's start with [indiscernible]

So can you talk about if you are already generating the growth that you are looking for in the video category. You recorded for the entire enterprise business around flattish growth in quarter 1. That would be my first question.

Yes. I'm not going to talk about specific numbers, but I'll talk a little bit about the mix in that flattish growth. So in that flattish growth, we did see some decline in both Speak and contact center -- Speak category and contact center headsets. We saw some growth in knowledge worker headsets, and we did see a level of growth in video that meets the ambition in the longer term, which is the meaningful growth ahead of the market.

And then secondly, in the frontline worker segment. As far as I recall, you only have 1 product available in this category? Are you planning to extend your product offering in this faster-growing category?

So yes, right now, we have 1 product that's specifically engineered for that category, the Perform 45. You can see that outside. I think we see some of our Jabra products are used in the category. And if we want to be successful in the category, yes, in the future, we will need to engineer solutions that are specifically designed for the segments we target.

We have a question from online. Let's see whether this works. We have a question from Maya [indiscernible]. So let's see whether we can get Maya up on screen. Maya, please unmute yourself and ask your question.

I would like to circle back quickly to market growth data that you have provided in your slides, and thank you very much for that, it's very helpful to understand. If I go back to the 2022 slides that we have, we're having the same number of knowledge workers stay at the same penetration rate and an expected market growth of around 10% for the headset business and around 20% for video collaboration. So I was wondering if anything has changed on the -- on the pricing side? Or what's the difference? If it isn't present penetration rate, why do you think growth rates are significantly slower now?

Yes. I think it's -- as I said, we expect some sort of stable in ASP. I think if we look at the market now, it's a fairly different position to 2022. I think we have seen -- when we're looking at developing our growth projections, we're looking at our own first-party data with the market leader, so our first-party data is pretty good. We're gathering data from third parties, both on sell-in and sell-out. And I think if we look at the performance of the enterprise headset market over the past 4 quarters or so, we see consistent negative growth. So while we think the underlying market is strong and we can see potential growth with improvement in macroeconomic conditions later in this year, we believe the 3% to 5% growth is what we might describe as a realistic base. Realistic is it's based on the strongest evidence we have right now and a baseline that we think is logical for the next 4 years or so.

[indiscernible] SEB. Just on the split between video and [indiscernible] maybe on the R&D side, what are the investments now roughly seen on these 2 areas? And then secondly, even before COVID, we saw in '18 and '19 more than 20% organic growth in audio. Based on, I guess, when we see the market shares, the market growth was significant market share gains. What are the -- how has the competitive situation changed post COVID you think?

I think if we take the R&D investment first. I think we are appropriately invested to be able to continue to drive our headset business. I think last year, we launched at least to evolve 2 new products to help us stimulate the business, particularly the Volve 265 Flex, and we're going to continue to invest going forward. Yes, we will have to invest meaningfully to be able to expand the video portfolio, but we have core technologies to work from. And as Soren will talk about later today, when we look at divisional profit, we still feel that we will have a strongly profitable business. I think if we talk about the potential market growth versus '22 again, yes, we've taken a meaningful amount of market share in the headset segment to be able to get to the 50% share level, that's for sure. If we look at how we might grow in the future, a lot of that will be about finding new segments, particularly the frontline worker and it will be about finding potentially geographies where we can grow. We still have a pretty competitive set. We're competing against major brands in large enterprises. But we think the strength that we have around customer-centric innovation, around the close relationships we have with our alliance partners and the go-to-market system is going to put us in a strong position to retain that market share, and that's the plan.

Maybe you can say what kind of geographies that you are thinking about are seeing as the biggest part of opportunity?

I think if we look at opportunities for penetration, Middle East and Africa is an area where we think we can grow broadly and India as well. So I think these are 2 key territories where we see potential in the period.

I can just complement also from -- I mean, I think we shared that in different shapes are formal so that market shares for us, we have talked about the global market shares here in Calum's presentation. Geographically, I think we are a bit stronger in EMEA than we are in the U.S. So I think that there's probably some market share opportunity in that. But still, on a global basis, I mean, our primary objective is to maintain the market shares we have and protect the healthy profitability while we're innovating and trying to ask one of the industry leaders, further drive the industry forward. I think the bigger growth opportunities are as Calum layout in video, of course, but also in the frontline worker. And the frontline worker, let me just clarify also because I think it's been one of those markets where it's probably been discussed for a long time in the industry, and the workers are there, of course. I mean it's a big part of the economy. The question is more like what is the willingness for the companies having frontline workers to invest in technology platform to make them more productive. And we seem to believe, together with our partners that is starting to come to a time where it's probably going to happen over the next few years. You never know, but it is the thesis we have and something we certainly actively are exploring what's the right approach here to participate.

Let's do [indiscernible] and then we end [indiscernible].

It's Oliver [indiscernible] from [indiscernible]. Two questions. The first one is about the huge potential of the frontline workers. So how to create awareness for the market for these workers? So using headsets in smart is definitely less intuitive than it is in the office for sure. And do you work already together with some retailers to explore these options? So that's number one. Number two is about the market share you described the 35% in value term volume terms, 50% in value sorry, 50% yes. How to think about the total addressable market because some parts of markets will not be addressable for us just because of price or also some users will continue to use the consumer headsets. So where do you think the ceiling is. Obviously, it's 100, but in realistic terms, it's much lower.

I think maybe to answer the question about market share first and then the frontline work. So the market share we described, the 50% and 33% relates to the certified part of the market. So those 20% penetration in knowledge workers. So when we talk about that knowledge market share, we're excluding the consumer segment and we're excluding the nonuse segment. If we think about frontline workers, yes, I think it's an opportunity not just for us. Of course, it's an opportunity, in particular for our alliance partners and Microsoft, who are very keen to extend the sale of licenses beyond, let's say, the office to the frontline worker. It's an opportunity for our channel partners to be able to drive that market forward. And actually, it's an opportunity for our customers as well to drive greater efficiency and productivity. So for certain, we'll be working closely with Microsoft with our channel partners to see how we can develop and unlock the category.

And then Brian, a very short question. Then we'll get a short answer.

It's very hard for me, but I will just make it one, which is obviously a very different profile in terms of growth rate going forward, much more depends on some frontline workers, much more dependency on video. Just curious how you're thinking about that impact of that on the margin profile. As call center comes down, as knowledge workers kind of stabilize and we get growth from these new segments, what does that imply for profitability, both on gross margin and EBIT margin for any one of 3 to answer [indiscernible].

Yes. I can take that one. I think it's evident that for both of the front-line worker and the video is, of course, lower scale at the minute. But even at the lower scale, we actually turn a fairly good gross margin on it. And definitely, once we reach scale and get into the operations wise to take advantage of that, we will be able to yield good gross margins on that. When we then come to the sales and marketing effort, I think Kannan did a fairly good job at telling you all that it's quite a good overlap on video side, at least where there was this 97% overlap to the channel we have today. So that we will clearly take the benefit of the size we are today and our current go-to-market models. So in that sense, we believe that it is accretive to our margin profile that is currently quite good.

Thank you, Soren. And we need to move on. Otherwise, we have an issue ending it on the day. So thank you, Carol, for enterprise side. And thank you, everybody. Please try the video solutions in the break. Please feel the experience is coming alive and find me any time in the end of the day, I'm happy to talk about any of this at great length. Thank you very much, everybody.

And then the next session, we would like to welcome Ehtisham on stage for the final and most energetic part of the divisions talking about gaming and consumer.

How are you all doing? Yes. You got the energy? Yes. Awesome. All right. So we're going to get into gaming, very disturbing to see this big picture of people up there. But I've been -- I've now been at [indiscernible] for almost 10 years. In 4 months, I celebrate 10 years. I'm a lifelong gamer. For me, it started really young when I was 12, I got an audio gaming entertainment system. I don't know if any of you remember that. It's been a while. I'm aging myself. I learned how to code and I learned how to create games, and I would actually sell those games to the neighborhood kids. And that's why I realize that I'm a gamer and I'm a capitalist. So for me, Steel series is something that is deeply personal. It's more than just a business. It is a mission. All right. So let's get into some of the details. So in the gaming and the Consumer division, we've got 2 businesses. We've got the SteelSeries business and the Jabra business. We've got a couple of other brands, but those are the 2 key brands. Besides both being B2C brands and sharing go-to-market strategies, they also have a lot in common in terms of lead mission. So for SteelSeries, it is about giving gamers that edge, that millisecond that's going to help them make all their teammates look absolutely terrible. Our goal is to help you look really good with your friends. And we call that going for glory. On the Jabra side of the business, it is about giving you that adrenaline rush, right, that motivation that allows you to have that great conference call that allows you to have that great workout. And for us, that is absolutely critical. Hopefully, you've checked out both the gaming and the consumer booths out there. You see our 2 young cyclists out there, biking like crazy for you. So please go and check out why they're biking like crazy for you. But that's all what Jabra is about. Now in terms of the business, on the SteelSeries side, the core businesses are headsets, mice and keyboards. And we are now expanding into additional businesses. These businesses are highly recognized Niels, highly recognized and lots of awards. In 2022, we won as it says of the 525 awards, which we were really happy with. In '23, we beat that record. In '24, we're looking to beat it again. And for this, the awards are really, really nice, right? But for us, the awards are a recognition that we're doing something different that we're actually making a difference in the gaming community. It's not just the same old thing. By the way, the same is true on the Jabra side of the business. So our business there is true wireless ear buds, largely. We've got other businesses, but true wireless earbuds is the biggest part of the business. And we're making products that actually make a difference, and you see it's recognized broadly as some of the best earbuds in the market. So now let's do a little bit of a deep dive on consumer and then we'll do it on gaming as well. So on the consumer business, it's a big market. the Bluetooth market, the global Bluetooth market is massive. It continues to grow. You can see the explosion that happened during COVID and then the post COVID adjustment that has happened. And for all of you who are following consumer electronics, you know this is the pattern everywhere. Every category has gone through exactly the same pattern. The Bluetooth business is no different than that. Right now, we're in '24, the market is still correcting. We still haven't swung back to growth. But we're hoping that by the second half, the market sort of stabilizes and we start swinging back to at least a little bit of growth. It is a really big market, but there's one player that's absolutely dominant in this market. And that player owns 2/3 of the market. So we are trying to compete for the remaining 1/3 of the market, which, by the way, is still a pretty big market, but it is 1/3 of what you're seeing out there, and we're competing against the likes of Sony and Samsung, both of whom had pretty big entrenched ecosystems. So our challenge is, how do you do that? How do you compete against these guys? And how do you also make money while competing against those guys. And this is the challenge that we've undertaken for the last year. We've made a lot of progress. So one of the ways you do that is through great innovation that actually is at premium pricing. In the last year, we've introduced the ELITE 10, which are probably the most comfortable earbuds you can buy. Great all around about, great sound, great active noise canceling, but outstanding comfort. Anybody you tried the ELITE 10 as yet. No. Thank you. Thank you, GM, folks. But again, I would highly encourage you to try them they're outside. Elite 8 active, the toughest earbuds buds on the market. And it's not just marketing [indiscernible], we've actually proven this out. So if you like to take your earbuds for a punishing run, biking, whatever it is that you do, elite 8 active are the earbuds for you. Both of these have come at a higher price point because they both offer something that nobody else in the market offers. We've managed to grow our ASPs by 18%, Q1 of this year to Q1 of a year ago. And that 18% gap is actually going to grow because these 2 products are becoming a bigger part of the mix. So as we've successfully done that, as you can imagine, that helps margin. Both the products have been really well received besides winning a CES Innovation Award, the likes of Rolling Stone of men's fitness, pretty much all the tech publications out there have recognized these as some of the best earbuds, especially the 8 active. The 8 active is by far the most awarded earbud for runners. And for the runners out there, please do try it out. I think you're going to be fairly impressed. As a result, when you look at our market share in a pretty short period of time, this is in the non-Apple part of the business. You see we've actually seen some significant growth. We're now up to a 5 share. And these products are still really young. So we're off to a good start. Now in addition to this, again, #1 focus is profitability. We have simplified the lineup. We are getting out of low price point products. Our goal is to compete at $99 and above. So we're discontinuing anything below that. As you can see from how we're simplifying the product lineup, it is about having higher volumes in fewer higher-priced products, simple formula. So by the end of this year, it's going to be a very streamlined product that starts at $99 and goes higher and is very, very focused on the premium space. The other way for us to make more money is to focus on the channels that make the most money. And there are significant differences between customers. Simplistically, online channels make more money than brick-and-mortar channels. There are exceptions, of course. I'm simplifying this a little bit. But if you look at our focus on winning in the online space, you can see we are overdeveloped versus our competition, and we are overdeveloped versus the category. And that's not by accident, right? That is, again, so that we can start driving more margin, more value into this business. We've also focused on our direct-to-consumer business, which is, as you can imagine, our highest gross margin business. That shouldn't come as a surprise, it's probably not a news flash. And we've seen some nice growth there. So all of this is good. And I can see from the happy smiles in every space is you're going, this is awesome. But we're not done yet. So -- even though we've introduced these brand-new products just less than a year ago, we're actually getting ready to launch Gen 2s, the second-generation versions of the same products. The generation 2 products do exactly what made the Gen 1s really successful, just take it to the next level. So the sound is deeper and richer. ANC is even stronger. We've amped up the comfort, and we are introducing the world's first LE Audio smart case. So you know the case that you carry your earbuds in, yes, we all have those, which you basically only use to store the Airbus and charge them, right? Well, there is now processing power in these cases. And what that does is it allows you to turn regular audio streams into spatial sound. So you're on a long flight. The good news is they have [indiscernible] 3. You're excited by that or [indiscernible] 2, I guess, this is not [indiscernible] but 2. And you're excited by that. The bad news is it's a crappy airline sound. Well, we can fix that for you because you plug in your Gen 2s, and all of a sudden, that's sound is going to be fully spatial. Same with treadmills. I don't know if you watch videos in your treadmills, we upscale the sound there. Some of you have TVs that are probably not the most -- the latest TVs, we can do the same on your TV. So it basically takes pretty much any sound source and converts it into special sound. We think that's a pretty big breakthrough. More importantly, consumers are willing to pay extra for it. So the Gen 2 versions of both the ELITE 8 active and the elite 10 are going to be even higher priced than the Gen 1s. This is all in service of raising our margins. So what you can see is in a fairly short period of time, we're using innovation to premiumize the lineup to make it simpler, to solve real problems and have consumers appreciate our products with higher prices. We are focusing our distribution strategies on the higher margin, higher profit margin channels. That's good. But I'll be the first to say, it's not enough. We've still got work to do. And we recognize we've got work to do. So we're not celebrating as yet. But I think we're on the right track, and we're going to keep exploring this and moving forward. All right. With that, I'm going to move on to gaming. So on gaming, I know I see some familiar faces. Some of you have been following gaming for a little while now, and some of you have not. So I'm going to give you a little bit of an intro to gaming. So unless you have been, I don't know, in deep hibernation, for a little while. Gaming is fairly mainstream now. It is a massive business. It's $188 billion, that's. We've sort of mixed in our slides, dollars in [indiscernible], but that's actually dollars. And as Peter talked about this right up front, some of those sterotypes about gaming being for young males, that's not true anymore. 45% of gamers are women. And even when you look at really hard core first [indiscernible] shooters, now over 1/3 of those gamers are women, which is great to see. The average age of 31, is not teens. It's a pretty broad range of age groups. A lot of people are retiring actually going back into gaming. I mean I know that's what I'm going to be doing when I retire is going back to gaming. And one of the key drivers of this business has been esports. So esports has really become massive. It's been massive for a while. It had -- just like the rest of the business, it had a COVID dip, but now we're back to hundreds of millions of people watching esports on a regular basis. If you look at the number of pairs, so we make a little bit of a differentiation between players and payers. We think payers is a higher quality number to look at because payers are people who are actually paying for some form of gaming as opposed to players only looking for free games. So if you look at the number of payers globally consistent growth, these folks are the folks that are more likely to buy gaming peripherals. And one of the other metrics we look at is concurrent users on steam. Steam as you know, is the largest online gaming platform in the world. And so you -- in steam, you see that really nice COVID bump in 2020. Now you will notice that there was never a depth. The concurrent users on steam actually never went down. And we talked about this for those of you who were at this event in 2022. I remember, this is one of the questions. And what we've said at that time is what we're seeing is lapsed gamers, a lot of gamers who are professionals who got really busy with their lives, who had families during COVID actually went back to gaming. And they've reformed their teams. And now during the week, there's -- every week, there's a designated gaming night. And that's exactly what we're seeing in the steam numbers is that the number of gamers has actually increased on steam. The other stat that we watch is the number of gamers who are playing 10-plus hours a week. That number is depending on which study that you see, it's 50% to 100% higher post COVID versus pre-COVID. Long way of saying, the structural foundation of the gaming business is very sound, and we do not expect that to change. If you look at the gaming peripherals business, it is also a big market. It's DKK 125 billion. Our core categories, the 3 core categories that we play in is only about 1/4 of the market. So we know we've got a lot of room, we being SteelSeries, have a lot of room to expand. But it's a really big market. Again, in gaming peripherals, you'll see that COVID bump in '20. You see that massive correction that happened in '22. And -- and then you see the stabilization that's happened in '23. And now we're starting to see the peripherals market go back into growth. It's not going to be in high growth in '24, but it's stabilized and we're starting to see growth again. We've had about 4 months of consecutive year-over-year growth now, which are really positive indications and really sort of backs up some of these fundamentals that I just talked about. There are a few key drivers that are going to continue to fuel the gaming peripherals business. And our best guess at this stage is we're looking at a 5% CAGR. That's what we are projecting. One is gaming is not just about an activity. It's a highly engaged, highly involved form of spending our time. So games when they're not gaming, what are they doing? They're watching other people game they are communicating with their friends about gaming. And very importantly, about half of them have become content creators. So half of young gamers are physically actively creating content and putting it out in social media and sharing it with each other. That's highly engaged consumers, and that's going to continue to drive gaming. Second one is cloud gaming is making gaming, hard core gaming really accessible. So before you need an amazing setup, you needed the best graphics cards, et cetera, et cetera. Now with cloud gaming since all the processing is actually done in the cloud, you can play pretty intense games on fairly standard systems. And that's opening up the world of gaming to a whole new group of folks. We're seeing new forms of gaming. So VR and AR gaming continue to try and find a place, still young in their journey. This is a journey of years. But again, it's adding more interest in gaming. And then finally, I talked a little bit about esports. And in esports, we've seen this collision of 2 worlds, right, some mainstream physical sports and esports coming together. And one place where you see that very clearly is F1. Anyone been to an F1 race recently? No? Of course, Stefan is [indiscernible] fan. So one of the things you'll notice that F1 races is almost every F1 race has an esports component going on. So there's a physical race going on, and then there's the esports race going on simultaneously. We are very happy to sponsor the Mercedes-AMG Petronas eSports team. And they're not going to share with you why gaming audio is so important to them being able to win. [Presentation] So hopefully, this sort of gives you an idea of how just gaming, going to esports, going into these big major sports is going to drive the category. The way we have won at Cel-Series, we've got a fairly simple formula, which is kind of hard to replicate, but it's a simple formula in itself. We're a company of gamers. Almost everyone at SteelSeries either a gamer or is a gamer want to be. So we have debates on which one you really are. But -- so gaming runs deep in the DNA. I think if you go out there and you meet Thomas and Ali, who are manning the booth, you will see they live, breathe, eat, gaming, and that's pretty representative of steel heads, which is what we call ourselves everywhere. And so that means we are so entrenched in our gamers lives that we can actually identify issues that gamers are having before they can even identify it for themselves. And that allows us to stay one step further. So that has allowed us to be on the cusp of constant innovation. We have solved these problems for gamers by using hardware and software. Over a decade ago, we realized that we needed to be outstanding at software. It wasn't just about the hardware to solve these problems. We've been investing significantly in software for well over a decade. Today, we have way more software engineers than we have hardware engineers. Our hardware is great, don't get me wrong. But the real magic is in the software. So that software integration gives us -- I would say, we have a decade-long had a lead over a lot of players that are entering the market today. And then finally, this is a brand that was developed. It was actually created here in Copenhagen in the basement of a building and it was created was founded to solve the problems of esports professionals. And this is way back in 2001, when the term esports actually did not exist. So esports is very, very deep in the company's DNA. Winning is very deep in the company's DNA. And so very entrenched in the gaming business. Besides working with esports teams and professionals everywhere, we work with 350-plus major streamers. We run our own streaming channels. We run our own esports tournaments. We work with every major game publisher. And out of that comes a grassroots audience. Our grassroots audience is about $160 million. That is the -- that's a huge megaphone, as you can imagine. The cost of acquisition on that megaphone is actually pretty low. We're not doing paid advertising as much as our competitors are because we've got this massive grassroots audience to fall back on. You put these 3 things together, and that's really been why we have won so many awards and have been doing really well. Not a big surprise. We have a lot to be proud of at Steel Series. With the company started by creating the very first surface for gaming professionals at it's called the ICE MAT. And there are many events that I go to where people come with their ice mat to show that they still have their original Ice mat. The very first gaming headset ever made was Steel Series. The very first mechanical gaming keyboard was Steel series, the very first mouse with an onboard processor was from Steel Series. The very first iOS game controller was from Steel series. The very first high-res audio system for gaming came from steel series, the very first adjustable actuation switch in gaming. And I know that sounds like that's super techy, but it is the standard now. Most gaming keyboards now have adjustable actuation. That started at Steel series. So we've got a long innovation, but that innovation now has also included a lot of software. So GG is our integrated software platform. It's the first integrated software and, frankly, the only integrated software platform in gaming peripherals. And part of that is a suite called Sonar. And what Sona does is it provides unprecedented levels of audio control, and it gives that to gamers. And as the first parametric equalized specialty for gamers, and I'll talk a little bit more about that. So a ton of first. GG is now at 3.5 million monthly active users. It has grown a lot. For those of you who were here in the '22 meetings. You may remember the numbers. They were significantly smaller. And so we've come a really long way in a really short period of time. 20% of the 3.5 million monthly active users, what we call acquired users. We call them acquired because they did not come to us by buying Steel series hardware. They came to us because of the software, they are using competitive products, but they want our software. And as you can imagine, we are converting them at a really nice space every single month. We are converting these folks into steel series owners. So GG has become this amazing platform not just to provide the ultimate optimization for your Steel series products, which is what engine does, but also to acquire, convert and retain consumers, gamers better than any of our competitors could. A couple of examples, moments. Anyone who's gamed over here will know that if you actually have a really good game, you want to show off. You want to be able to send the highlight of that game, not the low lights, but the highlight of that game to your friend group immediately, right? It was really, really hard to do until moments. What Moments does it automatically captures the highlights of your game automatically, which means we know what's happening in your game and actually can go in and pick out your highlights. We allow you to quickly edit that and with one click, get it out to your social media. So you can be hugely famous in seconds. We crossed the 1 billion moments Mark 2 months ago. So we're seeing a lot of traction on moments. In Sonar, we talked about amazing audio engineering and our newest offering is 3D [indiscernible] Trainer, which if you go to our booth, you can go and try 3D [indiscernible] trainer see if you can beat my score from this morning, that all if you can. And what 3D aim trainer does, it actually hones your skill set. So you can go and actually be a better player. The next step with 3D aim trainer to tightly integrate 3D aim trainer with all our products. You can almost imagine the power there of products that only not only help you win, but make you better gamers, hugely powerful idea. You see the product in the middle there, which is the alias microphone. So the alias microphone is probably the very first product where the hardware is not really the star. It is the software that's the star. The hardware is great. There's some really cool hardware engineering in there. But the software solar for streamers is really the star over here. We tried to solve real problems to streams anybody streamed in this room. No. If you go and talk to streamers, if you go and talk to streamers, one of the things you -- one of the problems they talk about is that audio is not just monolithic. For me, audio is complex. For me, audio is how does my game because I'm streaming my game, how does my game sound to you? I am talking, so I want to sound amazing. I'm going to have special effects. So I want those special effects to sound amazing. And if my mom happens to be in the next room vacuum cleaning, I want to block out all of that because I don't want anyone to know I live at home with my mom. So I've got these 3 different audio streams. I want control over every one of these individually, and nobody had ever done that before. To do that, you needed 3 or 4 different apps, and we solve that problem with Sonar for streamers. So let's look at the launch video. Actually, let's look at Sonar for streamers in action. [Presentation] So as you can imagine, if you can block out jets, you can certainly block out your neighbor throwing a party next door. As a result of all of this, we've seen some nice growth -- we have hit record high shares in '23. The -- our headsets, the [indiscernible] lines are the world's #1 premium gaming headset lineup. And what you can see is we've done that actually being the most expensive in the market. And that is the strategy. The strategy is we innovate. We introduce products to the premium end of the market, and we win by doing that. As you know, our margin has been hit for the last couple of years. Part of it was the post-COVID inventory and component hangover that we had. And as you know, we were the only ones that was pretty much every consumer electronics company, but it still is a problem we have to solve. And I think we've pretty much dealt with that. We've managed to get most of this excess inventory off the books. We've done it without hurting the brand, without hurting our premium image. And now onwards and the margin starts normalizing, promotional activity starts normalizing. And it's coming at a good time because the whole market is normalizing. So you'll hear this sort of normalization word a lot, but that's exactly what's now happening in the gaming peripherals business. In addition to that, the innovation machine continues to be strong, and that's how we continue to drive premium prices, premium margins, our grassroots marketing continues to be strong. And one of the things that is really starting to kick in now is being part of GN. So our supply chain and logistics costs are improving significantly. Stefan will talk a little bit about that in his section. We are benefiting from IT. We're benefiting from the R&D machine. We're benefiting from all these things, we're just making it easier for us to be even more competitive. All right. I talked about ongoing innovation. Two quick examples. Number one is the new brand-new white version of our Arctis Nova Pro Wireless. It is creating a lot of buzz. I can tell when we've done well because people start reaching out to me from my network, say, how do I get my hands on that. And the number of people who wanted and white Nova Pro Wireless has been really impressive. So the Nova Pro Wireless is, I would say, in my opinion, biased as it is the best gaming headset on the business. But if you do a Google search, you'll find that most people agree it is the best gaming headset in the business. So the white version is fueling that. It also allows us to go back to the full MSRP on Nova Pro Wireless. So it has a real business impact. It's not just a white color. On the left-hand side, you see our new Nova 5. And Nova 5, so Steels has traditionally been a brand that is targeted to PC gamers. Nova 5 really speaks to console gamers, huge number of console gamers out there. And it solves a real problem for them. I met a couple of console gamers. I know you -- some of you will relate to this. This is going to sound like I'm having an existential crisis, but footsteps are -- don't sound the same. Every individual or all of your footsteps have are different, right? You can buy into that. Every game the way footstep end in every game actually sounds different as well. The rustling of leaves in a game sounds very, very different depending on what game it is. And so what gamers really want is sound that understands what game you're playing and then modifies your settings automatically. So you don't have to do it yourself, automatically on the fly, so you have the perfect sound profile for the perfect game. How does that sound? Doesn't that sound absolutely amazing. Well, that's what we're introducing with Nova 5. So you're going to have in your hand in the mobile app, hundreds of games that are preloaded. And how do we know by the way that that's the right sound profile for that game? It's not even us. We work directly with the game publishers, and we say, how do you want -- how did you intend your game to sound. We work with the eSports pros, and we say, how do you listen for the right things in this game. All of that know-how is in a mobile app on your phone. And with one button, you can actually customize the soundscape of your whole headset. And in 10 minutes, let's say you get bored with playing whatever it is you there playing and you play a different game, another press of a button, and it's now adjusted for the new game. So I want to show you the launch video for the Nova 5. [Presentation] So this will officially get announced next week. You guys are getting a sneak peek. If you actually go out to the booth, you can actually test it out yourself. By the way, 100% of that video that you saw was made in-house. None of that is actually game footage. It is 100% SteelSeries footage because part of being a great gaming company is also being a content-creating machine. And that's one of the other advantages that SteelSeries has developed over many, many years. All right. So -- this is how we see the gaming rig. And we've said this before, we want to own the premium side of the gaming rig. There's nothing in here that's off limits as far as we are concerned, if it does a few things. Number one is if we can actually solve real problems for gamers that nobody else is solving and therefore, be able to charge premium prices for our solutions and therefore, be able to make higher than category margins, right? That's our criteria. And as we find those opportunities, we go in and we address each one of the things that are in front of us. And if you don't find there's opportunities, we wait. So we waited a long time before we introduced microphones. Still we had this sonar for streamers, which took us a few years to put together. There are categories that are being worked on right now that you will see in the future because they solve real problems and they take time to bring to market, but our goal is to own that entire rig. So in conclusion, both the gaming and consumer businesses are highly attractive and growing -- sorry, I was looking at Rune because I wanted to say, I did really well on time. Our winning formula over here is fairly difficult to replicate. New companies coming into the business today are going to find it hard catch up with us on software development, on our grassroots marketing activity and just the years of know-how. And that gives me a little bit of confidence, but it also means we've got to stay one step ahead, right? We just cannot give anyone an opening. And hopefully, what you'll see from us is a rapid state of constant innovation. We've got additional room to grow across the gaming rig and #1 goal right now for gaming and consumer as a whole is margins. Huge focus on consumers. We've made progress. We've got a lot more work to do. On gaming, I think we've got line of sight to get back to the kind of historical margins and being higher than the category on the margin profile. So thank you, and I invite my colleagues to join me.

Thanks, Ehtisham. And I would be curious to know how many gamers you have recruited during your presentation. I bet, a few.

We have 10 minutes, 15 minutes, for Q&A, after which we have a longer break. Let's start with this.

So you talked about innovation to premiumize the product assortment as a way of improving profitability, but you also mentioned that more was needed to restore margins in the consumer part. Can you talk about that? And secondly, can you remind us of the DTC share of revenue in the gaming part. And to what extent that you are able to replicate this in the consumer part.

Awesome. So let's start with the consumer business. I think what we shared with you was a blueprint, right, which is use innovation to drive higher price points and keep premiumizing the lineup. And I think the Gen 2 take it to the next level. We've got some other things in the works, right? So we've got to get into the next tier of price points. Focus on getting the go-to-market machinery as efficient as possible and see how we can get every point of margin out of the business. So this is negotiating with our key customers, trying to make sure that the terms and conditions make sense, it's pretty intense customer by customer discussions that happen. And then the cost of acquisition of consumers needs to be really low. At the end of the day, what we've got to figure out is how do you use all of these things to drive scale because that's one of the biggest things that's missing for us in the consumer business is just the lack of scale, right? We're up against these giant, giant players and to be able to compete with them, we need a ton of scale, and we need to be able to do that pretty quickly. So that's the work that's going on right now. And I think we're sort of figuring out every piece of it, we're being completely transparent. We don't have the answers as yet, but I think we're starting to put some of the pieces of the puzzle together step by step. On the DTC piece, nice try [indiscernible]. I'm not going to give the percentage of the channel that's DTC. But it's an important part of the business. And our goal is that the DTC for SteelSeries, the role it plays, it's directly linked into GG. So when we convert a Logitech user into a SteelSeries user, which is happening every day, it actually happens to steelseries.com because those 2 machines are tied in. So the channel plays a very, very unique role in the perm. We're not trying to have steelseries.com compete with the best buyers of the world are the Elgiganten of the world. It plays a very, very unique role in being tied in directly with our software and is the shop part of the software.

A couple of questions. So first, when we think about that overall 5% growth that you're seeing for the gaming business -- for the gaming market. How do you see the different categories, so headsets, mice, keyboards and the likes? What are, say, accretive? What are dilutive to that overall figure. And maybe also what -- how you see opportunities that you've not yet exploited, so that could be a simulation. Are those faster-growing categories? So that's the first question. And then the second question is on the gross margin, and I don't know whether it's a question for you. It's a question for Soren. But when we look at the gross margin today for the combined gaming and consumer business, it's around 30%, a little bit below. You have some fairly similar sized competitors Corsair, Turtle Beach that are mid-30s targeting high 30s already this year. You have a Logitech that's even higher. Any structural reasons why you shouldn't be in that range? What's the time line to get to that range? That's the questions.

Okay. Great. Actually, let's start with the margins on I'll let Soren provide more meat to it. But I would say, look, you just have to be careful in comparing gross margins across companies because I can tell you, when SteelSeries joined the way GN calculates margin is different than the way SteelSeries used to calculate margin. So you have to just be careful with some of the definitions. Having said that, our goal is to be at the top tier of margin brands in the business. There's no reason why we shouldn't be right up there.

And I think to support that, that is actually also part of the strategy. I think already now, we -- Ehtisham talked to it in terms of the consumer side where part of the [indiscernible] has actually been the mix pricing up right. Whereas on the gaming side, I think we will definitely also turn towards our operations folks to improve our -- basically, the way we source at a more competitive rate. And that's why those 2 together, I would say, lends itself to that we will be able to get amongst the peers. But of course, scale also matters here. And then, of course, Logitech to some of it is also a fairly large player, right? So they take advantage of scale also, I would imagine. But there's no reason not to believe that we can improve and we are improving on that.

The market growth is -- so on -- if you take keyboard, headsets and mice, the growth is a little bit -- it's a little bit cyclical because this is an innovation-driven category. So for the longest time, we were seeing lower growth on keyboards. And now we're actually seeing keep what's being significantly faster growth. And the reason for that is this thing I was talking about, which is adjustable actuation. I won't bore you because Rune will kill me if I bore you with what adjustable actuation is. But it has really driven new energy into the category. So right now, the keyboards are growing pretty, pretty fast. Mice are lagging a little bit. They're all 3 growth categories. So nothing is dilutive. They're all accretive, right? Just at different rates at different times based on where the category is in this innovation cycle, if that makes any sense. In terms of the other categories, it's exactly the same. When a big new Sim racing game comes out, explosion in wheels and pedals and that ecosystem and then it sort of flattens out. I think over time, these categories all grow roughly at the same CAGR, but the peaks and valleys differ.

We need to end now because there is a longer break where you need to go around and touch and feel our product with all a lot of colleagues. We will be back here at a quarter past 3, so 45 minutes each of break right now. Thank you. [Break]

Yes. All right. Welcome back. Hope you tried a lot of our products and our experiences out there. Now we are done with the division of focus. Now we move to the functional focus. First half is innovation theme, both covering innovation, also some generative AI with in our IT side. And then afterwards, we will have Stefan covering some of the operations. after which Soren will end the show on financials. We have roughly an hour planned now for the innovation part, and there will be a short bio break after that. But with that, Christoph, floor is yours.

Good afternoon. Are you still fresh? Yes. It's a lot of information today. And especially for those ones who have to go to the airport this morning, we really, really appreciate all of your efforts to come here and to stay with us. I hope you had a very good morning so far and learn about the attractiveness of our divisions, our markets and our products. What I want to share with you now is our plans moving forward on innovation Yes. So my name is Christoph Schmid. I'm the Chief Research and Development Officer at GN. And my background basically is I worked in different tech and med-tech company. And my mission was always one thing to innovate and to basically grow companies. And that's what I've done in all of those companies in a consistent manner. So when I then back in 2021, was evaluating whether you should join GN or not? Basically, I saw there 2 growth opportunities from an innovation perspective. Number one, I looked at the hearing aids, seem to be very good technology, but not performing to the full market potential when it comes to sales. And then the second interesting thing for me was really having hearing and audio at this time under one company because I believe there's a lot of innovation potential moving forward. And so far, my time at GN has been quite excited. I was quite involved, as you can imagine, in launching Omnia next year. And I'm super, super happy, of course, to see Scott representing how sales is going up and how well those products perform in the market. And then also, since last year, I had the opportunity to really join and heading R&D when we decided to join forces across and basically unveiled the innovation potential. But I must tell you, as much exciting it was to work in GN I'm even more excited to look forward in the future because combining R&D, this will really strengthen our capabilities to innovate and this is what we're going to cover in this presentation today. So there's 3 topics we want to talk, first, the general introduction to R&D, market trends and also what is so unique about our position and across all of the different product lines. Then how we -- they are almost missing and continue to win, right, by joining forces in R&D because, as you've seen, our products are really, really well designed and well differentiated from the market. And then I will hand over to my colleagues, Brian and Ann, and we will do a deep dive into AI because of course, as everywhere we see a lot of opportunities moving forward with this topic, and we want to show you our plans also moving forward there. I just want to shortly follow up on the megatrends that Peter has shared for us. Now from an R&D perspective, there's basically 2 topics where we want to deep dive. One, of course, it's technology, right? And there, we want to show you our plans how we're going to address this. But then you also see that there is different customization of the market, different market needs. And that's what you've also seen this morning, right? all in the divisions, there's great opportunities with slightly modified market opportunities. And I also want to show you how we're going to address those ones to really make sure that we capture this potential from an R&D perspective. Peter introduced you the purpose of our company, bringing people closer. That's quite bold, right? But I can also share you at GN, we are in a unique position to serve for that purpose. And why are we so unique? So as you've heard, our ambition through all of my colleagues talking to you is to offer a seamless experience. And this is from a hardware perspective, and as you've also heard many, many times today from a software perspective. Now if you think about all of those changes, those technologies, they are coming from the big technology companies, Google [ Soft ], Microsoft, Apple, you name them. what you see with our product and what is coming across is basically, we are close to the customers. Our products are either worn, headsets gaming consoles, hearing aids or they're directly interfacing to the customer like our video systems. So if you think about it in a way, our products are at this intersection between technology and the users, right? And so the function and what we have in common across all of our products, is basically to bridge those 2 worlds, the technology world and the user world. And this is where we sit with all of our products basically and this is why we can fulfill on our promise, basically and our purpose to bring in people closer. Now how do we do this from a global R&D operation standpoint? First of all, we are organized in 5 product lines that align with our 3 divisions, and I will show you this logic later on. Then we have shared functions research and technology, software and processes where we bundle our investments and they share them across the product lines. And then we operate at 8 sites. And when it comes to the selection of our sites, there's basically 3 criteria. We want to be close to talent, right? Because as you know, finding the right talent for an R&D organization, this is the #1 of success. Where do you get the right knowledge. It's about being close to our customers to really understand this. And the third criteria is, of course, also to be close to our suppliers and to the manufacturers as there's also a lot of potential, especially when it comes to scale. And therefore, just to give you a few examples, in Cupertino we have our competence center for audio processing. This is where you see basically find the best talent for audio processing in the valley, basically then in Chicago, we have our SteelSeries R&D, but we also have our hearing software and audiology development. And why are they there? Because for both markets, gaming and audiology, the U.S. is, of course, the biggest opportunity. So there is a benefit to have your engineers close to this market and to design to their needs. Then we have Ballerup, of course, as our headquarters and then different competence centers in Europe. Then also important to say, in Poland, this is where you get very good software and IT talents. So we have a software and IT side there. And then also, of course, we have development sites in China, close to our manufacturing partners to tap that potential as well. So as you can see, a very good setup. In total, we have 1,300 engineers around the globe. In R&D, and also product management, really taking care, trying to understand what is the need of our customers, what is the potential of technologies and then making sure that we bring those innovations to the market. Now how do we win by joining forces? And basically, there's 3 things that are important for me, customer-centric innovation. What does this mean to me? Number one, it's important to understand what your customer needs. Number two, it's equally important to understand the technologies that are coming and how can you deploy them in a meaningful value manner to provide benefit to your customer. And then thirdly, it really comes down to execution, make sure that you launch at the right time, not too early, not to too late. And then the same quality at the right quality. This is where it comes down for customer centricity, and this is what we ensured throughout our entire R&D operations. Co-innovation with our partners I mean, our products are integrating with big ecosystems. So of course, to have a good experience, this is important, but I will also show you this partnering, we took this in R&D to a next level because there is a multidimensional approach to this, and I will go now a deep dive into this. And then, of course, the third item, as we told you, to really unveil the innovation potential by joining forces across our divisions in R&D and bring those innovations to the markets. So those are the 3 topics that matter most to me. Let's start with customer-centric innovation. How do we ensure this? So first of all, we aligned ourselves across 5 product lines. And those 5 product lines, basically, they align with the division. This is our hearing aid business, It's our enterprise headset business. And as you've learned from Calum, there are specific requirements we need to fulfill there. Then it's our video and meeting room business. So there, we have our Speak series and the video business. And that's also important because sometimes you see video, there's as much audio in the video because if you think about a lot of the AI coming forward, is generated through the audio. So as much as it's important to generate a good video experience, it's important also to generate a good audio experience, and that's what we've basically bundled in this development center. Then gaming, and then the consumer business. And so what we aligned is basically assigned is our developers mostly to those development centers. And there, we work closely with the divisional heads to make sure and also with the divisions and their customers to really understand what is their need? What is the customer benefits and how can we basically generate value with this one? And so basically, if you're in one of those development centers, I expect you basically do one thing. You wake up in the morning and you think about how can you grow and innovate the business and then you go to bed and the next day, you do the same thing. So really, by this, we ensure this customer focus -- and I mean you've looked outside into the demonstrations, you've seen my divisional colleagues speaking to this. I think you feel how those products are designed to the customer needs. And by this, we ensure also moving forward that we will keep that edge. So we organized there in what we call development centers. The other thing what I also want to show you is the chip selection. So for each of those product lines, we run on different chipsets. And let me explain the reason for this. I guess for a video system, you understand those are those parts that you've seen, they are processing a lot, a lot of video. So of course, you need a powerful chip for that. That's a different chipset than the one you use in basically the true wireless, which has to be worn on the device, which is only processing audio, no video, which is not so data heavy and more optimized for power consumption. And then I also want to highlight for you for the hearing aid, and we have the ability, if there is an opportunity for us to differentiate this chip design, we can also do this ourselves. And that's what we're doing in the hearing aid industry because what we see basically for the hearing aids, there is just a higher demand for lower power consumption to be optimized around this. That helps us basically build the device smaller. And as Scott said, this is the #1 criteria. So we design our chip there. And this chipset basically is the foundation for a lot of the success that Scott has talked about with our Nexia platform. Because what we do there really good is 2 things. it's our organic hearing philosophy. And what does it mean from an R&D perspective? It means that we really understand the customers. We really understand how the brain works then we allocate our research exactly to those topics. And then we closely link our research activities also to the development. So we are very efficient on getting those algorithms basically into the devices. The other key advantage for our chip technology there is that we are quite modular and flexible in our setup. So what we can basically do is we can do a lot of changes by changing modules or changing software. And this enables us to also react fast and quickly to market needs or market opportunities. So for example, in Nexia, we saw an opportunity to just launch a product after a year. and we went for it, right? And you've seen the sales number. So probably has been a good decision. So really here with the chip technology, we have a differentiator, and we are also very well prepared for the future to keep this position. Super exciting stuff. Now I've talked to you a lot about the things that we are doing specific and product lines. Now you might also ask, of course, where do we join forces and there's a lot. Let me start first with research and technology. If you think about it, the sound processing, the battery management, the connectivity, sensor technologies going more and more into headsets, that is pretty much similar technologies, maybe slightly adoption for the different use cases, but the mastery to get those technologies under control is very similar. And so we can benefit to implement it across. Just to show you a historic example. I hope you have listened to the Auracast demos by setting that Bluetooth standard, how we worked in the past and how we can also work in the future about this. We were quite involved in setting the standard. And by setting the standard, we work together with tech giants, you see them up there on the slide. And we initially started to define this as a hearing aid standard, but then we figured out quite soon. Oh, that was really broad, right? And this standard is now emerging that moving forward, you can watch on the iPad with your kids and have a multistream, right? So it became a very broad standard. The good thing about is the minute we realized it gets broader. We could bring in the competencies across all of our different product lines and make sure that we have this in a coherent way. And of course, being involved in setting the standard, it always helps you then when you're rolling out the standard later on. We see the same benefit now when we are rolling out the standard because what we see, what you see here is the adoption rate is really going up. We see it quite fast on the smartphones coming this year, next year. Most of the new smartphones will be supporting the new standards and then the PCs are coming. And here also, we have the benefit because we launched it first with hearing aids. There you have the longest life cycle, so you really want to make sure that the devices are future proof, but then also, we work together with the different smartphone PC manufacturers on the hearing aid. So we made it work, but then we also take those learnings now into the implementation of our headsets and our video bars and to make sure that it's seamless. So you can see in the beginning and in the end, there is a benefit to basically have all of those technologies under the roof. So this is one example, but if you're talking about our algorithms battery technology, there's very, very similar approaches where we just benefit of having the different product lines under one roof. This becomes even more true when we are talking about AI. And why that? Because if you move into AI, you need to build a new infrastructure but you also need to be able to collect a lot of data to make sure that those algorithms. And therefore, especially in the context of AI, we see a huge benefit of teaming up that we can allocate also the necessary funds to work there on the forefront. And Brian will talk to you on that a bit later -- a bit more detailed. Software, you realized all of my colleagues have talked about software, right? For the hearing aid people, you know the importance of the fitting software role, right? The audiologist get trained on the software. If he likes the software, he continues to buy your hearing aids, right? We have a similar effect when Calum talked about IT decision-makers. With our Jabra+ we need to ensure that it works with the IT system and then basically, you continue to buy and purchase our products. And you've seen the same effect when Ehtisham was talking about Sonar plus mixing sounds. So all of our products come with the hardware and with the software component. Now the products are different, but the underlying technology they are pretty much the same, right? You need your development tools. You need to have your interfaces, you need to build up your cloud infrastructure. So moving forward, of course, we see a lot of potential to harmonize this, getting similar tools and then just doing the differentiations on the application layer. This gives us a lot of benefit. And as you know, software, really, really important topic for a company like our partner integration. I mean all of your colleagues have talked to that. And I want to just show you also from an R&D perspective, we have really, really a proven track record that we can do this well. We are collaborating as a technology agreement with Korea to bring bimodal solutions to the market. We started this in 2011. And we renewed this in 2018. And what we have shown continuously is that we were able to bring really groundbreaking innovation together in this collaboration. 2012, Jabra basically collaborated with Microsoft on a unified communication, right? This is when the entire enterprise business started. Probably also, you remember when your desk phones were basically removed and basically then replaced by Skype and the Jabra headset. Then, of course, we're working on standardization for hearing aids. We were the first tiering at we were working together with Apple basically on this connection, then we moved on to Android. And just recently in 2023, we again worked together with Microsoft to make sure that our hearing aids directly connected to the PCs to the new ones. And that's, of course, super relevant. As you know, people are working longer. So having a good hearing aid connection becomes much more important now at work than it was in the past. And then also, we worked then -- co-innovated with Microsoft. You have seen outside the demos, there are certain things, how we display the images, how we basically pick up speech, connect this to copilot. You can only do this with a Jabra device. And this comes because we started also when we entered the video business to closely collaborate with them. Now you see a lot of big names there, right, compared to -- I mean, GN is a big company, but compared to some at the reasonable size. And you see it's also when we have those talks, it's a bit both ways, right? So we are also interesting for those partners to collaborate Why? Because they've just seen that we've done it, but then, of course, also now as we see, especially more and more those things getting closer we are kind of a one-stop shop, right? You make a good connect to an enterprise headset, you make it to consumer to gaming, you make it to hearing it. So you work together with us and you know that it works across all of the modalities. So that's why we see also an increasing interest for those companies to work together with us because we act as a one-stop shop. Now this is forward integration, but we are taking really partnering to a completely different level because we think partnering is almost like a philosophy for us to engineer. We also have quite extensive network of academia. So we work together with the best known institutions around the world to tap their brains. Then, of course, since we operate on different chip platforms, we work closely with those chip vendors also helping them to prioritize their road map to drive information because many of the areas we are at the forefront with them, then we have an extensive collaboration with our manufacturers. Sometimes we go into joint development programs together with them to really tap their innovation potential from a supply chain perspective together with our innovation potential to really integrate and make those products. Then as I mentioned, technology sharing, we do this with Cochlear and then partner integration. Calum has talked about this, but we offer this also together with big customers in our other divisions, basically to integrate, to help them to work better with our software systems. So what you can see is really there is a network to partner into many, many different directions. And this gives us more to believers, right? First of all, I mean, we can offer a really seamless integrated experience. But then, of course, it also helps us to really focus on those topics where we can innovate and differentiate in competencies, but also tap on the innovation power of our partners, so to act really efficient. And as I mentioned, it's really -- it's 2 -- it's a win-win because also with our capabilities, that's quite unique to do such partnering, but also the portfolio broadness we have. So there's also a win for our partners and to us, and that's why I think it's also interesting to do this with us. And that's why we believe we have a real differentiator there. Another topic we share across is manufacturing. Stefan will talk a lot about scale, but you know a lot of the costs you define in the beginning when you design the product. And there, we work closely together with operations, and we standardize this interface that in the beginning when we start a project, we designed for manufacturing and sustainability to make sure that then also Stefan can benefit on the scale benefits on the operations. And the last thing, of course, you need also always a structure if you have such a complex organization to put it together. And that's why we have standardized processes and resource allocation. This is a classical development funnel. You start with an idea, you have a small investment, you increase it until you bring it to the market and then you go into the maintenance mode. And running an R&D organization in an efficient way, it's like classical portfolio management, right? You have many of those projects. It's important that you allocate where you have a good growth potential. Keep your costs under control, to make sure that you invest into the right things, but also make sure that you minimize your risk. And so what we started from day 1 when we joined together the R&D organization, we established one common process across the entire organization. And that is, of course, the foundation if you want to interlink the developers and you want to make sure that you basically benefit the best way from each other. From day 1, we start with this one. And now we evaluate those portfolio across a few criterias. First of all, we only invest products that come with a clear customer benefit. I think a lot of people say this. But then also what we do now with this process, we can basically cross-compare the investment and then also allocate our funds to the area where we see the biggest growth potential. Then we look into cross-sharing. So every project we run, okay, is there something we have already similarly developed in another product, we can reuse -- or if we do design a new component, can we design it that we can use it across multiple products. So we have always an eye on modularization, can we do this? Then, of course, make or buy, as I said, is there anything we can get from our partners and what are the areas where we can truly differentiate and let's focus on those ones. And then, of course, risk assessment and knowledge sharing, right? Many of the projects have similar challenges, how do we make sure that we take the learning into the next project to minimize the overall risk, right? And therefore, to run this, I mean, it's, of course, in an efficient way. It's really important that you follow up consistently on those measures. But I think the other important thing is by really scaling up in R&D organization is that we have so many projects that scale. And when you're doing innovation, you can always do a mistake. It happens. But it's important that you do not repeat those mistakes, right? And since we run so many projects with similar challenges, maybe in a slightly different context, we can really use this scale to minimize this risk and so therefore, overall this process, we believe that we can capture the potential by joining up and making sure that we create value through innovation moving forward. So to sum up, those are the 3 items: customer-centric innovation, as I've shown you working closely with the division to make sure that the customer needs, co-innovate with the partners, our multidimensional approach and then a really structured approach how we tap on those synergies and make sure that we benefit with the ideas and the knowledge from each other. And to conclude this, I would like to take you a short tour through our labs where we develop those products, if that's okay for you. Yes. So it's always impressive to see what it takes to develop high-quality device now a days. Now we would like to switch over, and I would like to introduce you to Brian. As you know, AI, that's the next big thing, and we are putting a lot of focus on this moving forward. And Brian, will you give you some insights there. Welcome, Brian.

Thank you, Christoph. As you can see up there, I have a fairly long history on the hearing side, and I'm actually extremely proud that I was offered the opportunity to take over entire research and technology when we did the merger between hearing and audio. So we have a fairly big group of people now working within our front end. And a lot of our focus right now goes into AI and how we can use that in our products. I'll try to take you a little bit through how we are thinking about AI today because AI is a fairly broad field. And unfortunately, also a little bit of a moving target because if you look at the definition, this is about computers that can reason the same way that people reason. And back in the '60s when AI research started, people thought that if we could just build big logical reasoning trees, and we could teach computers how to play chess, then we would have the perfect AI right because, of course, people are logical beings. They only reason rationally. And people playing chess, they are the upper class of intelligence, right? So if we could get to that, we had AI. In the '90s, the world champion in chess was beaten by a computer. And we then agreed that, that was probably not the right measure for measuring intelligence, right. Then we moved into machine learning, building statistical models based on data, and we have actually had this in products for many, many years. I think the first time that AI was claimed in the hearing aid was in 2003 when we started to put in environmental classifiers. So would we argue back then that hearing aids were intelligent to the same way as a person, probably not right. So this was not also the right definition of AI. Within the last years, we have seen a lot of progress within what is called deep learning. So this is actually a subclass of machine learning, various feed machines both loads of data and you've used a lot of compute in order to learn very complex patterns and data. That means that we can now ask a computer to classify pictures, this is a cat, this is a dog. And if you present it to a picture of a muffin, it would put it somewhere in between. Point being that we can do very, very important things. Today, we use these techniques in a lot of our products. This is where we drive most of our value out of AI today. That's within deep learning. But machines didn't become intelligent due to this, right. Subclass even of deep learning is the generative AI that we are seeing now with copilot and large language models. Ann will talk to later how we use that -- so why I'm talking about all this not being AI because it's important to understand that all these things are just tools for us to build better products. There's no magic fairies. We can sprinkle our products that has AI in the box, and then it just gets better. There's a lot of hard work behind what we are trying to do here. And that's actually also why it has been so good to see the joint forces in research and technology because all the foundational techniques, all the data we need to connect, all the sound scales that we are creating and the great labs that you're seeing out there in order to test these systems. They are largely the same, whether we are building hearing aids, we are building headsets or we are building video bars on the audio side. Of course, our video business is a little bit different because they work with different kinds of data, but the underlying skill set that we need for this is actually the same. So by joining forces on this, we have actually been able to build a much bigger critical mass than we had before being 2 different companies. I talked already about that AI is in our products already, and you have actually seen examples of that here today. The Engage AI for sentiment analysis that Calum talked about that we use in our call centers, that's a solution we have had in the market for some years built on deep learning. All the great video solutions that you see over there have a huge amount of AI. What you saw up on the screen before in the room that could sort of ignore part of the room and ignore persons that walked in and out of the door. That is an AI being trained that some part of the room is actually not the room. It is outside even though there is a glass wall and other parts are inside. So it can track all persons in the room. And what you see here in the middle is actually what the machine sees. It sees where do we have persons where are the hits, how are the hits actually rotated where do people look all those things, the machine knows so that we can reason about it. So when we talk about the intelligent meeting room being a collaboration between us and Microsoft, it's also a very real collaboration between our products and Microsoft's products because they each play a role in how we put this out. And Sonar, you saw the most obvious one with the jets flying by, and we could fill all that sound out, that is the obvious use case for using AI on audio and of course, when we look at applications going across hearing aid headsets and even in the rooms, it's stuff like that, that will be the future here. So we have really built a strong heritage here, and we have something that we can actually build on going forward. There's another element that is important when we talk about AI. And that is that we are not alone. As I said, we have something on the device and declines that we talked to, the video systems and the headsets talked to and also now the hearing aids. They play a different role. They also do noise reduction and selection of audio and so on and so forth. And it's important for us to actually work together closely with these partners, understand what they're doing, influence what they're doing so that our devices can work together and not against each other. And I think that's one of the other unique things that we have, as GN, seen from a research and technology point of view. We have access to these people. We can actually collaborate with them to make great solutions here. Now then you could ask, okay, so what is now coming. And a lot of these things that are hot right now are on generative AI. And we're not the only one saying that, right? We have told you the entire day that audio will be input, and it will be because it's faster to talk than it is to actually type this. Bill Gates thinks so as well, and he has been right a few times. He has also been wrong sometimes, of course, but mostly right. And the point here being that this is only possible if you have a good audio input to your agent, right? You saw in the numbers up there on the video bars, right, where you had -- if you had a good input, you had 93% to 96% correct recognition by the speech systems. If you had a bad input or there was noise in the background that was not filled out at the edge, this dropped close to 0%, right? And no matter how intelligent your agent is that will help you do transcripts or help you set up your calendar, 0% speech understanding is not going to help you. So we will play a vital role in being that gateway, and that's regardless of whether we talk hearing aids, headsets or video bars. So a lot of research going into making sure that, that signal gets through well. It's a new role for us that we not only, you could say, bridge between people. We don't only bring people closer, but in the future, we will also bring people closer to the machine. And that is a role that we are really looking a lot into right now and trying to pick up. So how is this actually look? I mean this is -- now we have talked a lot about Microsoft the entire day, but it's important to say that it's not only Microsoft that we work with and it's not only Microsoft that makes these thoughts right now. So this is an example from Google, right, that you can ask your agent to basically make an agenda for an event or you can ask it to add something to your calendar just by the push of a button in natural language, right? And then you say, okay, didn't Siri and Ok Google do this some years ago, and that didn't really work. And that's true, and that was on the top of this high curve of speech interfaces. And then we dropped to, okay, none of this works right. But now we get into a phase where these things actually start to work and we can start to interact with the machines in natural language and actually expect them to do what we tell them to do. Even though we are not native English speakers, all of us, even though we are mixing languages, and a lot of this will really change the way that we work. The ones of us who have been using the co-pilot technology for some time now will know that this is actually a fundamental change in the way that we work. So to give you a little bit of a picture of how we also think about this, I'd like to invite Ann to give you a little bit more futuristic view on how this can look in the future workplace.

Thank you, Brian. Do you hear me? Okay. Good. All right. This is me. I'm Ann Fogelgren. I'm the Chief Information Officer for GN. I've been here for 3.5 years. I have one overarching theme in my career, which has been various positions, and it's all about customer-centric IT, digitization and innovation. But I'm not going to talk about that here today. I'm taking a -- I'm continuing what Brian started to talk about and that's AI in a broader sense. And I will zoom in on the generative AI aspects of this and what it means for us in GN. So I will take you through how we have successfully launched generative AI in GN and also talk a little bit about what our approach is in the future is to actually secure that we actually generate value going forward. So this is something I'm very proud of. As you know, in late 2022, ChatGPT hit the world with a storm. Most organizations, they weren't really prepared. They were looking at it and in my world behind at that point. We started in GN to look at generative AI, several versions before you actually got to the ChatGPT version that was released in late November '22. This gave us a huge advantage. We were able to launch our own platform in Q1 2023, so almost immediately afterwards. And this platform, as you see behind us, is the front end. This is the GN's version of this, which is ChatGNPT that we have had now live for almost a little bit over a year. As you can see on the screen, this is our front end to generative AI. So this is not only the chat version, but this is something that we are working on to make sure we launch out in different areas in the organization. We did this in a very secure way. We actually brought in internally, which made it really, really secure and within the walls. We have the same security level on our internal ChatGPT version as everything else what they have in the organization. We saw an immediate gain of efficiency around 10% to 40% on creating content. And also today, we have about 25% that has actually adopted this, and this is something that we see rising every day, and we -- the better we get in launching the new solutions, we can see that this is something that's going up. So we have approached this and approaching this for 3 phases. The first one, we started in '23, as I said, and that's the fundament of this. So we started on efficiency and made sure that we actually had a platform that was secure and ready to go out in the organization. And we're still working on that, and this is the basic for everything we do about ChatGPT and generative AI. The next phase that we are about to go into right now, we have heard some about it today from the other ones, and it's differentiation. This is about how do we use generative AI to have a unique proposal to the market and give us a unique edge. The last is a little bit further down the line, but it's something that we have to keep in mind when we look into these technologies, is to make sure that we don't lose focus on something that is 3 to 5 years. And here, we have -- we can see indications that it will be definitely new business models coming out of generative AI. So this is something that we are focusing on heavily. I will take -- I'll give you some examples on how we've been working with this in GN. And I will start with showing you 2 examples on how we've been working with generative AI on an efficiency focus. It's important to say that we got about 100 requesting in '23, so it's a lot of focus and interest in GN on this. We delivered 20 solutions during '23, and I selected the 2 that is interesting to show here. The first one is the GN HR support copilot. We've had about 1,500 requests in each month to HR, and they've had difficulty to follow. We have made sure that we have a process that has been manual that we have been converting into our own generative AI solution. On the screen behind me, you can see an example of the maternity question coming from an employee that is being fed into the AI support engine and being produced and presented to the HR operations individual in the way that they would like it to be returned to the employees in the organization. This has given us a 50% efficiency gain on this solution that we have in production. This was one of the first one we launched in '23. Ehtisham was talking about how important content is for -- and content contributions is for our SteelSeries. So this is the Steelblogger AI. This was developed in order for developers to very quickly push information out on blogs from the beginning to the end. Historically, this is something that's been gone through marketing and so forth, a tedious, long process. But with this solution, they could actually deliver production-ready or print-ready blogs very, very quickly. And as you probably know, developers are perhaps not the best communicators in the world, so this is something that helped them package this correctly and presented to the market. But perhaps what's more interesting with this case is that it only took us 2 days to deliver this in co-creation with a SteelSeries team. So you can see that the power of this platform that we have introduced in GN can give endless of options and opportunities to actually continue down that path to find new efficiencies to deliver. Moving a little bit into the future. And here, I have 2 conceptual cases with me. This is about differentiation, and this is all about how we can get a very sharp edge in the market. So we have a Frontline+ case with us, and we have the audiology assistant case with us. These 2 are all about extending and enriching our existing products and making sure that we get the stickiness in the market towards those physical products. So the first one here is the Frontline+. So this is a conceptual case, and it could actually apply to any frontline worker situation. So it could be any warehousing, retail and so forth. This one here is from the cleaning staff or a maid service that we have run this. So here, take the physical product, which is, as Calum described before, very critical for -- in generative AI perspective, and we have very clear voice and that actually can retrieve the information in the proper way. So this is an interaction between basically our generative AI assistant, our headset, the cleaning staff and that's guiding them around the -- in this case, the hotel to find the most optimal path to come through the service that they -- but also to change if there's any changes. So actually, the AI agent is guiding them around to make sure that you get the best service. The second one is the audiology assistant case. This is coming really close to home. I think this is beneficial for both the hearing, so Scott's organization, but also Calum's organization. This is taking the Speak2, Jabra Speak2 units, placing it between the audiologist and the consumer. The unit is listening in on the conversation and retrieving attributes from the conversation. This enables the audiologist to keep eye contact with the consumer rather than staring into a screen. And for all of you that knows a lot about hearing loss, key to it is to be able to see the expressions from the consumers or the customers' faces in order to make them feel safe but also be efficient. This service stitches data from hearing tests together with the attributes, and it could also be other different data sources that is actually bringing in to enhance this. And at the end, it gives a recommendation to the audiologists in order to make sure that they get the information quickly and can actually reduce the fitting time. In this case, we estimate about 20 minutes can be reduction in efficiency. But I think the biggest gain here is probably for the end consumer and the customer that is sitting in the room that will get a really, really good experience. Going into the last portion of this is about how do we take this to new business models. For us in GN to make sure that we have this competitive advantage and being ahead of the game, we look at infusion of AI-first mindset across the organization, so not only in R&D and in IT but across the whole organization, making sure that we'll secure infusion of AI into our value chain. So this is something that we have to look into rather quickly, where are the gains and how we can actually use this actively. And the last thing you have heard several times today is to use our strategic partners to make sure that we're actually building on those relations to get even further ahead in the market. As you heard Christoph talk about in the beginning, it was all about customer-centric innovation as one of our cores. I hope me and Brian has informed you a little bit or given you a little glimpse of how we use AI in GN and how that is an important component when we look into customer-centric innovation. All right. And thank you for listening.

All right. We have time for a few questions on the innovation part here as well. Anybody? I think [ Martin ] in front.

I just have one. So lots of interesting technology that you're showing and lots of innovation you can do in software. How well positioned are you to actually get the full leverage out of these opportunities? And from a capability perspective, do you have the people that you need, especially on the AI and software side?

Yes. Yes, I would say so. I mean, of course, for the AI, you need to build new capabilities, but I think we are on a good track there. And yes, I think with the other things, we are very well prepared, and now I think that's really the good thing, right? Since you run into so many different product lines, you can also learn, right? And there's always something, which is really good in one of them, and that really helps you to level up with all of those aspects across that. So that's exactly one of the opportunity why I think we are in a good position, but it really can even help us to speed up on this topic. So yes, yes and yes.

I think we have Niels.

A question for Christoph. So do you envision your R&D budget to grow faster than the anticipated 5% to 8% organic growth for the GN group in the next few years?