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Hello. Welcome all to GN's Q1 2022 Conference Call following our release this morning, Danish time. Thank you all for dialing in. It's great to have you on the call.
Participating on the call is Gitte Aabo, CEO of GN Hearing; Rene Svendsen-Tune, CEO of GN Audio; Peter Gormsen, CFO of GN Store Nord; and myself, Henriette Wennicke, Head of IR and Treasury.
Today's presentations, which can be found on gn.com is expected to last about 15 minutes after which, we will turn to the Q&A session. The agenda for the presentation itself is that Peter will start off with group highlights, then Gitte will provide an update on GN Hearing; Rene will provide an update on GN Audio, sorry. After which, we'll go back to Peter for a financial update and financial guidance. After that, we hand over to Q&A with questions from the queue. And with that very brief introduction, I'm happy to hand over to Peter.
Thank you, Henriette. Good morning, everybody, and thanks for joining our Q1 '22 call today. Starting on Slide 4 and a snapshot of the quarter. Q1 '22 was, as expected, a difficult quarter for GN due to the global supply chain situation. However, with the knowledge we have today, we are on track across the company to deliver on the financial guidance.
In the quarter, we delivered revenue of DKK 3.9 billion, translating into a negative organic growth of 21%. The adjusted EBITA ended at DKK 264 million, equal to an EBITA margin of 6.8%. As a result of the SteelSeries and Lively acquisitions as well as traditional seasonality and cash flow, the adjusted leverage ended at 5.4x in the quarter. And with this quick snapshot, I'm happy to hand over to Gitte for an update on GN Hearing.
Thank you, Peter. The key messages I want to leave you with are the following: we are on plan. Our financial performance in Q1 is as planned, both in the core and emerging business. We are delivering on the road map as planned, and we are following our plan with regards to improving profitability.
But let's start by looking at the GN Hearing Q1 2022 financial performance. GN Hearing delivered 2% organic revenue growth in the core business and 76% organic growth in the emerging business. The hearing aid market has recovered at large, except for a few markets, which I'll get back to later.
Total revenue increased with 8%, reflecting the organic growth, the consolidation of Lively and a tailwind from exchange rates. The gross margin was down a couple of percent compared to last year, which was driven by the elevated freight market, the increasing input costs as well as the ASP impact in Costco.
As earlier communicated, we have put pricing initiatives in place to counter the negative impact, but this had very little -- limited impact in the quarter. The EBITDA margin in the core business ended at 2%. This is a reflection of the gross margin impact and investments into future growth opportunities including launch costs associated with the 2 product launches. The EBITDA in the emerging business was negative DKK 67 million as a result of some front-end loaded operational investments.
Nonrecurring items of minus DKK 29 million was booked in the quarter related to the optimization of the supply chain. Free cash flow reflects the decrease in reported earnings, but partly offset by a positive development in working capital.
Let's move to Slide 7 and some more color on the regional development. Beginning with North America, we delivered 1% organic revenue growth in the quarter, driven by solid performance in the independent market, but offset by the development in VA and the negative ASP development in Costco. Excluding VA and Costco, the organic revenue growth was 7% in North America in the quarter.
Moving to Europe. We delivered an organic revenue growth of 2% in the quarter. This also included our decision to suspend all sales to Russia in the quarter. We saw, among others, a strong performance in Germany.
In our Rest of World region, the organic revenue growth ended at 3% compared to Q1 2021. We experienced some impact from COVID-19 on some of the larger countries in the region like China and Japan. And to give you some more flavor on the current situation in China, remember that the vast majority of hearing aid sales is taking place in the larger cities and especially in Shanghai.
In April, around 50% of our points of sales were in lockdown. This naturally has a significant impact on our sales in China, which in 2021 was a mid-single-digit part of our total revenue. However, in other COVID waves in China during the last few years, we've seen a relative quick recovery following a lift in local restrictions. We do expect the same pattern again, but timing is clearly difficult to predict.
Moving to Slide 8 and our recently launched products. By the end of February, we started shipment of ReSound ONE BTEs and Jabra Enhance Plus. It is clearly early days, but initial feedback has been very encouraging. Jabra Enhance Plus is now available at local ATPs across more than 2,000 points of sales in the U.S., which is a stronger interest than what we had initially expected.
On the product side, let me also stress that we are fully on track with the other exciting product introductions for the year. We'll be launching a new rechargeable ITE during Q2 and have a very exciting new platform planned for Q3.
Let's turn to Slide 9 and an overview of our supply chain initiatives. As mentioned earlier, our current profitability is below our historical levels and below our midterm guidance. This must change. And in our core business, we expect to be back at an EBITDA margin of more than 20% in 2024. To drive this, we'll have a dedicated focus to digitalize, simplify and automate our supply chain.
As a consequence, we continue to expect nonrecurring items in the magnitude of minus DKK 150 million during 2022. In Q1, we've booked DKK 29 million in nonrecurring costs. These costs mainly cover severance costs related to targeted layoffs of 25 employees across the value chain.
Around half of the 25 employees were located in the headquarter in Denmark and the other half was targeted layoffs around the world. We'll continue to report as detailed as possible on these initiatives as we move forward.
Finally, let's move to Slide 10 and an overview of the performance in the emerging business. As mentioned, the emerging business and Lively had a strong start to the year with 76% organic revenue growth. In the quarter, Lively had a couple of very interesting launches, which are continuing to build momentum.
We launched a new high-end hearing aid, which drove a strong product mix. The new Lively app was also successfully introduced which is the first hearing care app with an end-to-end customer care journey. Lastly, it is worth mentioning that the integration process is running smoothly with back office functions now being integrated.
These investments naturally impacted EBITA, which ended at minus DKK 67 million. These front end-loaded investments will drive momentum in the coming quarters, but will also result in an improving earnings profile for the rest of the year.
In the future, we'll continue to build momentum around the business and introduce a Lively local concept for customers wanting both an online and off-line experience. We are currently piloting different concept opportunities, which is progressing well.
And with that, I'm happy to hand over to Rene.
Thank you, Gitte, and hello to all of you. So I'm now pleased to take you through GN Audio's results for the first quarter of 2022. Let's move to Slide 12.
As Peter mentioned, Q1 of 2022 was a challenging quarter due to the global supply chain situation. Compared to the Q1 assumptions we provided in February, we were unfortunately impacted by the COVID situation in China and Hong Kong by the middle of March. This effectively meant that 1 week's worth of revenue ran into April. However, everything from the delay in March has now been caught up.
Right now, we are, as expected, seeing an easing of the component situation, while the logistics situation is very volatile and unpredictable, but we are getting more components delivered every day. So back to the numbers. So due to the supply chain challenges, the organic revenue growth ended at minus 30% in the quarter.
SteelSeries delivered minus 35% organic revenue growth also due to the supply chain challenges. In both cases, the sell-through from channel was higher than the sell-in from us to channel. The underlying demand for our enterprise products continues to be very strong.
We're very happy with the inflow of orders across enterprise categories. The growth in the quarter was solely a reflection of supply. With these numbers, we do take share in our main categories also in Q1 of 2022.
The adjusted gross margin ended at 45.5% which was 6 percentage points below Q1 of 2021, and it can mainly be explained by 3 factors. One is the elevated freight market and input costs, in general. Second is the development in foreign exchange. And third, now the consolidation effect from bringing SteelSeries into the business.
As earlier discussed, we have put in place pricing initiatives for February 1, but they had very limited impact in the quarter, mainly due to the backlog situation. Due to a strict focus on operational costs, the adjusted EBITA margin ended at 14.4%. Nonrecurring costs amounted to DKK 219 million impacting EBITA following the SteelSeries acquisition. Free cash flow was impacted by these nonrecurring items as well as traditional cash flow seasonality.
Let's move to Slide 13 and the regional performance. GN Audio's regional growth also in the quarter was largely supply driven, as I have mentioned earlier. In North America, we delivered a negative organic growth of 26%.
In Europe, we delivered negative organic growth of 36%. And in the Rest of World region, organic revenue growth was a negative 14% in the quarter. All of this on a very high comparison base of 82% growth in Q1 of last year.
So let's move to Slide 14 and the current supply chain situation. Some of you may recall this slide from our Meet the Management event in March. We have tried in a very simple way to illustrate the current status of the supply chain by splitting it into 3 elements: components; manufacturing capacity; and logistics.
As you know, the situation is ever changing, but what you see on the slide is how we see the situation today. And let's start with the component situation. We still expect a significant gradual step-up in deliveries from Q1 into Q2 and onwards.
Currently, we are seeing more volumes coming in as expected. However, volumes are still running below demand. On the manufacturing side, we are currently not constrained by capacity in general. But given the COVID-related impacts, this situation remains fragile and unpredictable.
Logistics, however, is currently volatile, unpredictable and comes with high cost. The COVID-19 development in China and the related restrictions shall be seen in combination with the very fragile logistics situation globally. It is clear that it has become more challenging in recent weeks.
I think we have all seen these examples, illustrating the stressed logistics situation across. So all in all, the global supply chain situation is constantly evolving. To mitigate the component situation, our R&D teams are executing strongly on the reengineering projects, and this means that we already from June expect to see some of these reengineered products with customers.
And with that, let's move to Slide 15 and the integration process of SteelSeries. The integration of SteelSeries is going very well and according to plan. The operations and corporate function teams have now been fully integrated, and we have seen no business disruption in the quarter.
Integration-wise, the next step will be on alignment across IT. The operational synergies are also on track, despite the supply chain challenges in the quarter, and we expect around 50% of the announced DKK 150 million operation synergies to impact the numbers already this year.
In terms of nonrecurring items, we have incurred a total of DKK 237 million in the quarter. This is more than half of the expected nonrecurring items for the year. And with that, I'm happy to hand back to Peter.
Thank you, Rene. Moving to Slide 17 and the group financial highlights. On group level, GN delivered negative 21% organic revenue growth and an EBITA margin of 6.8%. The results came in largely as expected, but were naturally impacted by the suspension of sales in Russia as well as the temporary manufacturing and logistics challenges related to the COVID outbreak in Hong Kong and China.
With improvement of the component situation and the coming product launches in GN Hearing, we're currently expecting a stronger financial performance on top and bottom line already from Q2 '22. Total nonrecurring items were DKK 266 million, driven by the effects of the SteelSeries acquisition as well as the supply chain initiatives in GN Hearing. The adjusted leverage ended at 5.4x.
And with that, let's move to Slide 18 and our cash flow for Q1. Across the company, we were impacted by traditional seasonality in the quarter as well as the phasing of nonrecurring items. GN Hearing's cash flow was slightly better than last year, primarily due to better development in working capital on top of the continued investments across the business.
In GN Audio, we saw a large decrease in reported operating cash flow due to the nonrecurring items as well as tough comparison base from last year. We continue to deliberately build inventory across components to be able to quickly deliver significant higher volumes when chipsets arrive.
Let's move to Slide 19 and the capital structure. As mentioned earlier, the adjusted leverage ended at 5.4x in Q1, driven by the acquisitions of SteelSeries and Lively and traditional seasonality in earnings and cash flow. On top of these effects, we also distributed slightly more than DKK 200 million to our shareholders as part of our yearly dividend payment. The net interest-bearing debt ended at DKK 14.2 billion, while we had cash and cash equivalents of around DKK 1 billion.
Recently, we have also executed some new R&D loans, which means that the balance of our drawn part of the M&A bridge facility is currently around DKK 2.2 billion. Due to the expected cash flow generation in the remaining part of the year, we expect the M&A bridge facility to be fully undrawn and paid around year-end. From Q2 and onwards, leverage is expected to decrease and we are confident that we will be back within our target range of 1 to 2x net interest-bearing debt to EBITDA within a couple of years as earlier communicated.
Let's turn to Slide 20 and the financial guidance for 2022. Let's keep this very brief and just underline that we confirm our financial guidance for '22 across all parameters based on the knowledge we have today. We are on track according to our internal plan to deliver on the guidance despite the current COVID-19 situation in China and the mentioned logistics challenges.
And with this, I'm happy to hand back to Henriette.
Thank you, Gitte, Rene and Peter for the updates. And with that, I'm handing over to the operator for Q&A. [Operator Instructions]
[Operator Instructions] We have a question from Maja Pataki from Kepler Cheuvreux.
This is Maja. One question for Rene, can you talk about how you see momentum in April with regards to demand for the products? I mean you have been quoted to say that your backlog is still record high, but what are you seeing on new orders coming in? And particularly, are you seeing consumer sentiment weighing on SteelSeries demand?
And a second question now on your balance sheet. Looking at your leverage, it's at record high levels, and you are on track to deleverage in the coming months. However, we are at complicated times. We don't really know where results will come in. At the end of the year, I guess, nobody knows where the world is going to go. So how do you think about potential need for refinancing of debt at higher cost? And what kind of tricks can you pull to make sure that your balance sheet starts to look a bit more attractive, not in the long run, but in the medium term?
Maja, thanks for that. Rene here. So I think, I mean, we don't sort of guide specifically on sort of weekly or monthly momentum. I can just say that when it comes to the demand for Q2, as we see it now, we're in good shape.
And I think the reality out there, of course, is that when you are in a constrained environment as we have now been for many months, it's actually hard to see the underlying unconstrained demand, really. So right now, demand is equivalent with the supply that across the industry we can generate and there is more demand that we can fulfill as we speak.
On the consumer side, on the consumer sentiment and SteelSeries, I think 2 things. One is that in the categories we operate with SteelSeries, we did take market share in the first quarter despite the fact that we had this negative growth on a very high comparison. I think we have to see because I read newspapers as well and all the analysis on the sentiment, we are operating in the premium segment. And I guess there is a situation where typically you can say that segment is less affected by these sentiments.
In other words, people who buy this stuff are not really yet affected by perhaps a higher cost in such a way. But of course, we never ignore the realities out there, but we don't see it yet.
I think, Peter, if you could speak to the balance sheet.
Yes, Maja. It's Peter. So we certainly have a lot of good dialogue with banks on this. And I think it's fair to say we have multiple options that we're looking at. And of course, we are monitoring the market closely, and we are seeing the same thing as you are seeing, but we are not concerned.
I think we have a lot of good options. Whether it's a trick to play, I wouldn't call it tricks, but we remain quite confident. We will bring this down, of course, 5.4x, we also consider very high, and that's also why we take this very serious, and we'll do a lot of necessary things to deleverage already in this year.
Our next question is Martin Parkhøi from SEB.
Yes. Martin Parkhøi from SEB. Just a question for Rene. First, Rene, in your -- now that you're seeing this significant gradual improvement, as you worded, in supply. Are you expecting or putting into your guidance that you will start to restock in the second and third and the fourth quarter? You have previously said that there's more or less 0 product in the value chain. So do you expect to be able to restock with the 6 weeks or something like that, that you normally would expect?
And then just maybe when we look at other gaming peers, for example, Logitech, when they actually had 1% positive growth year-on-year. I understand that they had a significant decline quarter-on-quarter. How can the development be so much different compared to what you're delivering?
So thanks for the -- on the restocking, of course, we would love to do that. The reality, of course, is that we are a shorter buffer. As you know, our own buffer is not existing, really, and channel stock is low.
I find it hard to believe that we will be able to fully restock the channel this year, actually. But of course, we are assuming that we'll have significant uplift in components in the second half. And so far in this quarter, I mean, we see that the promises we get from silicon suppliers, they keep it, but that we would be able to sort of go beyond the demand in a restructured channel, I think that's probably doubtful.
On the growth and the market impact, I guess there is, you could say, that's a category matter here as well. We are in the audio category where we are sort of dominant in the high end on the gaming space. Some of competition has had good run on some of the other parts, steering wheels, for instance, a hot topic out there right now.
And so it is -- there's a mix issue with that. But it's clear that we've talked about that earlier that the growth in the premium market is there, and there seems to be not really yet affected. The rest is that SteelSeries did take market share in Q1.
Just as a brief follow-up, Rene, you -- I understand that you will not talk about current momentum, but you are expecting a significant lift in organic growth in the remaining 3 quarters. Can you talk a little bit about phasing? Should we already start to see year-on-year growth in the second quarter, and then, of course, accelerating in the second half?
We do expect growth in the second quarter, yes.
Year-on-year.
Yes.
Okay. Great.
Our next question is Niels Leth from Carnegie.
First question on GN Hearing. You mentioned on your slide deck that you have taken pricing initiatives. Could you talk about the timing of those pricing initiatives and how much that we should build into our models in terms of price hikes?
And secondly, for GN Audio. So your competitors like Apple and CORSAIR, they're talking about flat revenue in calendar quarter 2 compared with calendar quarter 1. It could be that they are referring to the consumer business. So are you not seeing any slowdown in consumer demand? So that would be the 25% or so of your audio business that comes from the consumer part.
So it's Gitte. On the pricing, I mean, we have implemented price increases during Q1, and those are offer -- I mean, they are of different sizes compared on the channel, market, the relationship with the customer and so on. And we expect to see the effect of these price increases as we move into Q2. They had limited impact in Q1. And the impact to expect is really low single digit.
On the consumer demand in you can say, first of all, in the first quarter, we landed the -- we talk about the SteelSeries already as expected, a little bit less due to the supply situation, the demand strong. On the consumer side, a bit the same. It was not a fantastic quarter, but we don't see a pattern of reduced demand. I guess, in a similar way here, I spoke to, I guess, the -- as long as you are on the higher end of the segment for now, it seems to be less impacted by this sentiment.
Our next question is Oliver Metzger from ODDO BHF.
The first one is on your ample chart you showed about the supply chain situation at GN Audio. So on your manufacturing capacities, your ample model looks green. But how should we interpret green? Is it meant that the manufacturing capacities are sufficient to handle all net orders after your component supply and logistic orders? Or is green meant from an absolute base that you can produce full steam? So that's number one.
Number two is also on your guidance on SteelSeries. So you made some comments on SteelSeries. So the organic decline was still significantly weaker than expected. Your guidance is unchanged, basically above 10% growth. So there are -- and you discussed this macroeconomic headwinds, lower consumer confidence, et cetera. But it looks like, to the point of time when you provided the guidance, the overall sentiment looked even better than it looks right now. And implicitly, it means that your underlying performance will be stronger over the remaining 9 months compared to what you've said before. So perhaps you can you just clarify what makes you even more confident than before, please?
Right. So thanks for that. On the green dots on the supply, what it means on the manufacturing is that as long as you could -- let me put it like that, we are out of lockdowns. As long as this is operating as it is today, we have ample capacity. We can manufacture everything we need to manufacture when we get components. So we are not restricted in any way on the manufacturing capacity as we speak.
On the SteelSeries guidance, as -- I mean, we cannot sort of disclose actually what we are planning to do. But I think the rumor is out that we will be launching at some point of time, new products into the market. It was semi-known before we acquired the company.
So it's clear that the thesis plan has all the time been second half-loaded, and that has not changed. But you're right, we had a little setback in -- with a bit weaker revenue in Q1 due to component issues. Same situation here that we are expecting more, and it is coming so far.
Yes. Potentially one follow-up because you commented in the past that if there is some shift in, let's say, due to supply constraints, et cetera. From one quarter into the next quarter, were some pent-up demand. But you also said that after some time, basically pent-up demand is lost. So where we are right now? So there is some shift, but how do you valid risk that some of this pent-up demand you currently hope for will not be realized?
I think you have it right there that what we have spoken to is that when you have a higher order backlog and it runs for a too long time, the business sort of restarts, meaning that orders that are put in for 5 months back may not be exactly what the market needs at this point of time. So you lose a backlog after -- you cannot hold it for 3 quarters, basically. So I think here, of course, we are betting on the fact that as we bring products to the market, it will satisfy the demand that is out there, which is a larger than we can supply also in SteelSeries as we speak so. So you can say it is on that side of the business, a supply matter like we have been speaking to on the rest.
Our next question is Kate Kalashnikova from Citigroup.
It's Kate Kalashnikova from Citigroup. I've got 2 questions. Firstly, on supply chain. You talked about gradual easing in supply chain pressures you're now seeing. This is actually in contrast to Apple. Apple talked about substantially larger supply chain headwind in June quarter compared to March quarter, noting component shortages, logistics and COVID-related disruption. So what gives you confidence that supply chain indeed will improve given these comments from Apple? Or is it because of mitigation actions essentially you are taking?
And then secondly, on consumer demand. If you look at [ Todabeach ], they talked about significantly impacted consumer spending environment. And the companies also start to talk about down-trading risks given increases in cost of labor. I understand that GN has not seen much impact so far, but there is usually a timing lag. And GN is in the premium segment, so could be impacted. So what gives you confidence that mix will not be impacted going forward, both in hearing aids with more people potentially switching to Costco or public channels, but also on consumer audio side.
Right. Thanks for that. On the -- of course, I should not speak for -- but if I read Apple's comments right, they actually said that the supply of component situation is easing up, but they are referring to logistic challenges in China. That's how I read it. And of course, that's exactly what we are communicating as well here that we are getting more and more components.
We are also speaking about the risk that the combination of the COVID challenges in China, which is for us unpredictable what will happen and the overall logistic chaos, let's just say that across the world may pose a risk for us. And I'm not trying to hide that. But as we see it now, as we're operating we are working through that.
But we acknowledge the risk of COVID-related lockdowns that in a worst case, could affect the manufacturing if the factories are shut down in South China, but of course, also can impact the move of goods in China and in and out of China. So I think we understand all that. And you can say, the outlook is a combination of an upside if we create -- if we get sufficient supply, a bit to a Parkhøi's question earlier, and of course, a risk if something happens on the logistics side. I think we just need to be clear on that.
So then on the [ Todabeach ], I think that somehow for me confirms the sentiment I spoke to a little bit earlier. It is a matter of are you at the premium end or you're not. And here, you have 2 different replay on the premium side, [ Todabeach ] has a little bit different strategy. So we seem to be less affected for now on the matter.
Okay. And then on hearing aids, what about the risk of more people switching to Costco and public channels, waiting a bit longer to get hearing aids. [ Are there any chance ]?
Yes. So let me address that. I think on the hearing aid side, first of all, in terms of the market growth in volumes. I mean, if you look back to when we had the financial crisis back in 2008 and '09, we actually continued to see market growth.
I think we have already seen over the past year or so that a lot of growth is driven by public reimbursement. We've seen that in France. I think also we've seen a significant growth contributor in the U.S. coming from [ men's care ]. So I think already we see, if you like, a lower price point driving significant growth, and we expect that to continue to be the trend as we move forward.
Our next question is Christian Ryom from Danske Bank.
A couple of questions from me as well. It's Christian Ryom from Danske Bank. First, on GN Audio, can you provide an update on the pricing initiatives that you've implemented? First of all, whether we should expect to see full effect of these in Q2? And secondly, whether you plan to implement any additional price increases after having put through the first round of price increases?
And then my second question is to GN Hearing and to Lively. Now you print revenues of around DKK 40 million here in Q1. My understanding -- or I hear you talking about that you've now progressed well with the integration. How should we think about Lively going forward? Is this sort of the run rate from which you grow? Or is there any sort of significant onetime effects here in Q1, which might mean that we should see lower run rate revenues for Lively in the coming quarters?
So Rene back here on the pricing. As we said, we implemented the price changes on 1st of February. You can say the reality, of course, is that when you have a backlog like this, it takes some time before you run out of the business that was secured before this happened. These increases will have close to full effect late this quarter.
So at least from -- at least from Q3, you will see full effect of this implementation. So it's coming in just as we speak in a larger portion. We have not announced any pricing increases to the channel, and that will be the first place we go for commenting on that.
But it's clear, there is something we are monitoring all the time. It was the right thing to do when we did it first time this year. If there will be more, we probably will tell you everything about it when we are there.
So in terms of Lively, I mean, the top line growth we see in Q1 has nothing to do with the integration. I mean when I talked about the integration progressing well, it's on the back office functions. So we're not seeing any real benefit yet from a combination of online and off-line.
We are piloting that as we speak, but we haven't really seen a significant contribution from that yet. So it is Lively, if you like, on its own growing. We expect the underlying market growth in the online space to be around 30%, and that's kind of our benchmark.
And we are not guiding on the top line for Lively because it is a start-up. So again, I think we've seen a good start to the year. And our benchmark here is that the underlying market is growing 30%.
Okay. Great. But just to confirm, there was nothing exceptional in the Q1 numbers that you would want to call out with respect to how we see Lively going forward?
No, there was nothing exceptional.
We have a follow-up question from Maja Pataki from Kepler Cheuvreux.
Gitte, just to clarify. You have been stressing China and the lockdowns and the importance of China for hearing. Now looking back at the last couple of weeks, shall we basically read that as a cautioning on Q2 growth as China is going to weigh on the quarter?
Yes. Thank you for that question. It's clear that with 50% of our sort of point of sales closed down in China right now and China having the magnitude it has on our sales. It will have some impact in Q2. We have, however, seen from previous lockdowns that as soon as they disappear, the market recover fast. And therefore, we also expect situations should be different in the second half of the year.
Okay. So the Q1 and then, therefore, even stronger acceleration in H2 than what we have anticipated. Is that correct?
Well, I think we've all along expected a stronger second half of the year than the first half, especially due to the fact that we launched a new platform in the third quarter. And that's obviously a key growth driver for us.
We have another follow-up question from Martin Parkhøi, SEB.
Yes. Martin Parkhøi, SEB. And Rene. Just -- I know that will be very detailed, but if we look at the phasing last year because, as you know -- as we know already last year, you were hit by a supply shortage. And as I recall it, the wording for you was there was already an impact in Q2 of -- 2% or 3% or some of that add. And then I think that you said some double digit in Q3 and then also double digit in Q4, could you confirm the impact we saw already last year just for comparison reasons.
And then I know I asked you questions -- a question before also with the -- if you expected to see organic growth year-on-year in the second quarter. And now I will try to do it even more detail. Do you expect year-on-year growth in the second quarter when we adjust for the extra week sales you got in Q2 this in -- you will get in Q2 this year postponed from Q1? We call that is, of course, a benefit for you. That was that.
Okay. I think your numbers on last year, you are spot on. I mean we said around 2% loss in Q2, and then we had double-digit effect in Q3 and Q4. So that's exactly right.
On the Q2, I think we should not get much closer. We do expect double-digit growth and not -- sorry, we do expect growth in Q2 -- sorry, that to be growth. And it is including whatever is there now from Q1.
There are no further questions at this time. Please go ahead speakers.
Thank you very much, operator, and thank you, everybody, on the call. And so with that, we appreciate your time today, and we will see you on the road. Thank you very much.