All right, I think time is up. At least it's 11:00 A.M. Last ones are sneaking in, but that's fine. Hello, everyone. Thank you for... joining today. GN's 2024 Capital Markets Day. We're super excited 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'll cover for today, for a very rough highlight agenda, is that Peter will start in a few seconds unfolding what we think is GN's value potential over the coming years. Then we have a session called Driving Success in our three divisions. Hearing, Enterprise, Gaming, Consumer.
We will also touch upon what we call winning through One GN. Through our functions of scale, where we'll deep dive into customer-centric innovation and also operations setup and how we think that is agile... and scalable. Finally, Søren will summarize 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 for all you to ask questions. We'll have the full management team up here for the sessions, 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.
You should just raise your hand in the Teams client, and then I'll try to redirect questions to you. If you are told, then please unmute and turn on your camera so we can hear and see you here in the room. 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 P.M.-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. With that very short introduction, I will hand over to Peter in a second, but first start with a short video showcasing our purpose.
Hello, everyone. Great to see you. Also on behalf of myself, warm welcome here to Ballerup for those of you that are in the room. Also 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. 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'd like just to kick us off giving the summary in a holistic way. Everything I say will, in one way or another, be covered in more detail throughout the day. 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. As such, also, we do not plan a Q&A right after my session. We're taking it in all other sessions, and then towards the end of the day, Søren and I will have a longer Q&A summing it all up. Also, Rune, you made a good marketing gig for the breaks. 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. 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.
Doing this because it's important for us, and I think it is really what is creating our culture and also what has, for many, been the reason of coming here and staying in GN 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 the Far East, including China. 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 has changed, of course. There have been some great times, some challenging times. The company has renewed itself many, many times over.
But what has 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. As you can see, it spans from way back to quite recent. We also left out quite a bit of innovations during the years. But this has really continued to drive us. Bring new innovation that helps people communicate better. That helps 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 has essentially been the bedrock for our purpose. A purpose that means a lot to people at GN, which is about bringing people closer.
We do this for all these different ways of communication. I think this is great because we're here to create the 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. I think that is important to reflect on. We're, of course, a Danish company in some ways, and we're, of course, having our headquarters 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. 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. We have a very global mindset when we develop our businesses. I think it's also what creates the strength of the company. We have really made it to a global presence and also benefit from being a global company today. We have 7,000 employees. Perhaps what is even more telling is that we're producing a product every second. 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.
Perhaps most importantly, they will arrive at the destination where there's a user that's been enjoying these products for years. We're doing 1 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. 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. Let me just first say a big thanks to all employees. You are the one 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.
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 more sustainable production methods, recyclable plastics, better packaging. We also take a lot of efforts into using energy in a better way. 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 for 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 with developing the great business, of course. Let me now gradually move into the business side of GN. I'm starting here with a page with some of the most powerful global trends that affect us. You know a lot about how markets are both created and sometimes destroyed by global trends. We think we're in a very good place with GN where we actually think we largely benefit from what's happening in the world. That's great, and it goes across our 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. Then gaming. Maybe not all of you are gamers, but you should know that gaming is something getting really mainstream. Gamers exist today of all kinds of age and background. This is not like male teenagers in a basement any longer. It's really a global market created for everyone. It's changing even more every day here. 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. That's putting a lot more kind of pressure on what great technology is.
A lot of the great technologies around the world are actually created in the consumer space because that's when we're most demanding. You now need to bring that also to the enterprise era to be successful. 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. 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 three markets: hearing, enterprise, as well as gaming consumer. You will get a much more deep dive here very soon throughout the day. Let me just start with saying we believe we are in three 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 non-cyclical 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 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 strong 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 would say every new office that has been refurbished, I would say, in the last two years or so tends 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 in 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 both headsets and video systems, a gateway to a lot of the AI services.
We can do a lot of innovation around this to make this even better in the future. Then lastly, it is an attractive industry in terms of profitability. 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. Here we think we are very well positioned. We've been early into this market. We've been really driving innovation around hybrid work for a long time. 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 themself. 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.
We travel often to headquarters of very big companies and have this kind of partnership-like meetings. Quite often, they come here to Ballerup as well to really shape the future together. Then the go-to-market around the enterprise. Here we work fully in a partnership model with distributors and resellers. This is a relationship forged over a long time and really relationships that are win-win. We need each other, and we are winning together. These relationships have really helped us also to build the 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 and consumer. Let me just say this is a fascinating market. Consumer, we have really sharpened our value propositions.
You will see some sports-focused demos here outside illustrating the active profile we have on consumer. When it comes to gaming, there is a great gaming stand. I'm sure it will be pretty full in the breaks where you can see all the good things we're doing in gaming. Gaming, as I said here a while ago, are not for the geeks anymore. It's for everyone. What's true is that when you're sitting there, you like to win. SteelSeries is the company helping gamers to win. That's why it's so appreciated by everyone that are dedicated and passionate about gamers. It's also more than products. It developed into a very strong software suite tying it all together. The products itself will not do it. It's really when you add the software layers to it that we also can show a demo here outside.
Here I think we are stronger than anyone in the industry, lending a lot of support to our ambition for the future. Then lastly, SteelSeries is a premium-focused company. As I would say, we are also in the 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 three markets. And then how do we organize to go after this? Each of the markets 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 working in R&D, operations, and the core administrative functions. They are supporting the businesses across, really helping the divisions to be even better together than they would have been standalone. Just for you to reflect on this, we have more employees working in the horizontal shared capabilities than what we have in the dedicated divisional teams. That's how we organized. That's how much we believe in this. 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. Here, Christoph with the 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 three.
The first one is the customer-centric innovation. It's really the R&D, of course, with innovation, but it's also the link to the market. 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 would 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 days. As we've been going through this strategy process, it's becoming more and more clear to us how important this is. In technology, there are 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 and forge long-term partnerships across value chains. Here I think we already are in great positions and have made great progress, but there are even more we can do. Lastly, the whole operations area. Here, Stefan, we lay out both the massive setup we have but also the flexibility and agility we have in this setup. 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. 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. We really believe that the markets where we're operating are attractive. It's, of course, also about submarkets and segments of markets. If we find new opportunities, we will be ready to enter if we find synergies and believe we can win. 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 key to us, but only if we can do it with healthy margins. We really like to find a balance between good growth and healthy margins.
There's been a period in the past where we've probably been growing better than producing margins. We really like to find the balance here. We're very much focused on margin improvements, in particular in the short term, because the margins have not been good enough. Over time, as we're refining the right margin levels, really finding the balance here between healthy growth and healthy margins. 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 types 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. Finally, we've been in a period with too much debt.
We're very committed to deliver the company to get back to healthy levels soon. It's part of the targets we announced. 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 have said, what do we feel really good about and what 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 rebalances and finds 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 three 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. 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. Video. We entered here four years ago. We launched several great products, and some of them you will have in demo rooms, some of them here outside. 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 in video. And as such, we need to see an accelerated growth of the video sales. It needs to be fairly significant for us to make us happy. We're growing 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 the low profitability in gaming and consumer the last few years. A lot of that has been in gaming, oh, sorry, in consumer, while gaming has performed fairly well. The consumer margins, we have improved them 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 GN. So these areas we're very committed to drive strong focus on and improvements on. So let me just tie it all together.
There were communications going out this morning, so you've probably all seen the updated midterm targets already. What we're saying here is that from now until 2028, we believe we're organically, it's important with a focus on organically, we'll grow 5%-8%. The EBITDA margin, we believe we will be able to achieve 16%-17% by 2028. Then the leverage ratio, 2.0, also by 2028. 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. We look forward to a closing session here with Søren, where we will lay out a bit more granularity on the financials and, of course, taking questions also. But once again, warm welcome here to the day.
It's great to see so many of you. Let's make sure we do it really interactive and have a good time together. Thanks, everyone, for joining. Now I can ask Scott to come up to 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. I think the last time I saw many of you was in Nuremberg at EUHA 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. The things that aren't on this page are the years that I spent in the 1990s hopping around from a few different jobs, from 10 years in consulting, bouncing between industries, doing different types of projects. 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?
When I was at BCG, I got the opportunity to work with Siemens in this really cool industry called audiology and hearing. 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 lead a healthier life, a happier life, a longer life. It is really cool what we do. If you have any experience that with someone, I encourage you to do that. 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.
I really think that makes a big difference because they are super passionate about what we do and know the marketplace really well. Beyond that, we also have thousands of employees that share this same passion for our industry and same passion for what we do every day. 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? 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. Also, let's dare our customers. 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 could we dare end 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 and 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.
As we think about how do we realize this 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. We lean into this partnership. 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 three 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 are 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 I'll 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 healthcare, great demographics that we have within our space. The market has been growing at about 4%. We see that continuing, 3%-5% value growth over time. Unit growth, I think, is a bit higher, probably 4-6. We see a little bit of decline in ASP between channel mix and market mix.
We also see that innovation helps within that too. So we think the market's probably going to grow 3%-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 have I seen a 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 OK. Back in 2013, 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 three things that have really helped us with that and really driven that.
Those three things just happened 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, 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: focusing in on what matters the most.
One of the things that I spend a lot of time around is when we go to different markets, we look at where our market share is across the globe. Are we higher or lower? Then let's think about those. There's three 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 five big buckets of channels, segments within the hearing aid space. There are subsegments within these.
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 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. That's how we're driving the business moving forward. That's the conversations that we have internally. 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. 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 a 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 US, you guys know that? Yep. So they are helping fuel the overall global growth within this, providing more access to customers in the US. Big growth that's driving this across all the open market globally. 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. 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 Hearing Australia, they are super busy.
The most important thing we need to do as a company is be reliable, that 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. Sounds so simple, right? That is really hard to do, especially when you're doing a product every second. But that is one of the most important things that we can deliver there. The fourth channel, and it's interesting because this is one that I get so many questions on, is around manufacturer-owned, retail, and networks. So in the marketplace, the manufacturer-owned is about 80% of that, so 10%-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's 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 healthcare 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 have been wearing hearing aids for several years. 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 roadmap. 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. I know you guys want to hear it too. I'll talk about three 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 in noise. Number one and most important thing for a new user. Guess what? For an experienced 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, number one thing they're asking about. Hearing and 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 and noise. Guess what? OMNIA and Nexia, the best hearing aids in the market for hearing and noise. Research after research.
We just finished, just yesterday, I saw results comparing against some new products. Nexia still drives number one hearing and 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, "OK, I need a hearing aid, I'm having trouble hearing in 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 a discreet 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, 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 it fits 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 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, it 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 want 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 process 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 Air. First one where you didn't feel occluded 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 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 enabled hearing aid users to use their smartphones like everyone else. We launched M&RIE, the Microphone and Receiver in the Ear.
That allows, and that is, 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 pinna. We're using their natural ears 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? You know we'll be outside and it's all loud and there's tons of noise with everybody talking.
You can select, you can naturally in your brain take down the volume of everything else and focus on whatever speaker you want to listen to. 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 your brain 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, that launch just started a few days ago. First time a full portfolio we have done.
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 five 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 five things about Nexia that Dr. Miguel loves.
Here are five reasons why ReSound Nexia could be the right hearing aid for you.
That's pretty cool, right? Sounds pretty cool, but it sounds so different to me and my voice. Well, check this out. I've just activated the noise program. The difference is my voice. Now you can hear my voice more clearly and you can still hear the music.
It is the smallest rechargeable model we have ever made, without compromises on power or battery life. It feels so natural that you may forget you are wearing it. All ReSound hearing aids are designed with a low center of gravity to fold naturally behind your ear, which improves stability, performance, and comfort all day long. All this with the maximum protection rating IP68 not only in the hearing aids, but also in their receivers. So you can enjoy great hearing in all weather conditions. Imagine going to the airport and hearing important information about your flight directly in your hearing aids. Connect to many electronic devices at the same time and stream audio anytime you want, even televisions at home or in public places. Sharing audio with your family while watching a movie all together in the train, and many more.
It is very likely that your next phone, tablet, or computer already incorporates this technology, and with ReSound Nexia, you are ready. All this with much better sound quality than classic Bluetooth and less battery power. Like, for example, check this out. This is our new TV Streamer Plus. This is our first streamer that works with Aura cast. So now you can enjoy movie nights with your family and friends with much better sound quality and use the ReSound app to adjust your preferences.
Part of the Nexia campaign is Ann.... So I want to get to do my ... now, if that's OK. 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 and 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 in 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 CROS and BiCROS now. It is the best CROS BiCROS in the 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's 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? 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, hey Scott, what's next? I think there's a couple of things. One is, for me and 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 EUHA when people would 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 and 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 presentations. 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 two is innovation. And I would also argue that this is not one-time innovation. You cannot be a one-hit wonder. That's the reason we're on 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 softwares. It's like, do you like changing between an iPhone and an 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 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 advisor. So I'm going to share with you guys seven 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 partnership and different things that we're doing. Many of you were at Capital Market Day a few years ago. I talked about ReSound Accelerate. We were just launching it then in the U.S. We have since rolled it out in a test market in Asia. We've 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. We talk about that as an engagement program because it's much more than just a loyalty program. 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 three or four years. It normally corresponds with a 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 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.
Did you know that something really good is going to happen to you today?
The gift of hearing is so wonderful.
It's sort of a kickstart to our holiday season here. It gets us in the spirit of giving.
The Gift of Hearing campaign is our way of giving back to a community that has blessed us beyond belief.
The light on her face, the self-confidence, she just immediately became like this more empowered person.
I am doing something that's truly making a difference.
It is such a gift to the community, but also to yourself and to your team.
How are you hearing?
Oh, I'm 100%.
Can you hear my voice?
Yeah, I can hear you good.
This is a way for us to promote giving back and doing our grassroots efforts in order to stay involved in our community.
People are aware of who we are. They're aware of what we do, what we're all about. They see our hearts, which is important. It really grounds you as a pillar in your community. It draws attention to your practice. This connects you to a real human aspect that people crave.
It's really important for our practice to position ourselves as the experts in hearing healthcare. This campaign allows us another platform to show that.
It's given us the tools to better get that message out to people, as well as make it look more professional and branded.
I get to pick one person that gets free hearing aids.
This will change your life.
ReSound is an amazing partner in this entire process, and they were there hand in hand with us. So any questions we had, any crazy ideas we had, they were like, yep, let's see what we can do.
It is easy, easy, easy. It takes very, very little effort on our part. They sent marketing materials, and our social media circulation just went through the roof during the campaign.
TV stations, when you're doing a campaign like this, they are so willing to let you come on and do something for the community.
ReSound has given us as providers this wonderful gift to be able to share with people who truly need it.
You know we're going to continue to do it for as long as ReSound does it.
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, and they're looking to grow. These are multi-generational practices. We have the example on the page here, 4 generations. They have been with Beltone 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. You see some new names. Hearing Australia, we had started working with last year, big part of fueling our growth.
Worked very closely with Costco, with the VA, with the NHS, with all the managed care companies in the US. But there's also a new one here, Specsavers. 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. 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 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 HCPs 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're 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 break even by the end of 2025, beginning of 2026. 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.
These are people like Best Buy, and Walmart, and Amazon, and seeing if seniors want to buy their hearing aids in those types of locations. I don't know the answer to that yet. I think it's still early days in some of those channels, so we'll see. 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. As part of the Smart Hearing Alliance, this allows us to play on the really upper end of hearing healthcare. These are people that have really severe hearing loss. 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. Alliances like this go even broader.
Being part of GN, we also get earlier access to companies like Microsoft. So when 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 their 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, are you spending enough in R&D?" We get to punch above our weight because we have a lot of these relationships.
Then last, I want to mention a new partnership that we just launched last week, end of April. 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 two, very much a topic that is on people's minds these days. We've taken 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 and the early onset of our mild cognitive impairment and 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. You see 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 multi-year 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's 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's 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 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 four 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. 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. I hope that you guys as shareholders within GN view this a bit as your story as well.
It is becoming more and more clear that our ear is a window to our health. By paying attention to our hearing, we can live long and healthy lives. At home, I'm a caregiver for someone experiencing mild cognitive impairment. Daily, I see the impact of clouding thoughts, loss of memories, and loss of bodily functions. It's challenging entire health systems and deeply touches individuals and families. Because no cure has been found, no hope is shared with loved ones. Often these stories we hear around dementia and mild cognitive impairment makes us want to cover our ears. But listen to this.
Scientists have discovered a connection between our ears and cognitive decline. Their studies show that maintaining good hearing may lower our risk of dementia. We have made it our task to share this knowledge, to collaborate with healthcare professionals, policymakers, and partners worldwide to raise awareness, promote hearing health, and support continued research to fully understand the connection between our hearing sense and cognitive decline. We understand that we are just one piece of the puzzle, but we're determined to take the lead in protecting our most precious possessions, our ability to hear, to think, and hope, connecting us to the people, activities, and things we love. Join the movement to fight cognitive decline from the ear inwards. Thanks, you guys.
Thank you, Scott. And Peter and Søren will join the stage. I had one job for today. That was control your agenda and the timing. I'm sorry.
Thank you, Scott. You just ruined 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. But 15 minutes, both also for you online. Please raise your hands. And I think it was actually Veronika that was first with hand in here.
Amazing. Hey, guys. Thanks so much. And Scott, thank you for the presentation. Three ones. I will promise they're 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 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. Thank you, guys.
Yep. Happy to. So maybe the first one, VA, super excited for the launch in 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 us 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. 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.
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 had breakfast with one of our customers that's here this week, and we talked about managed care. In his local marketplace, it's a community that has many people that have had manufacturing jobs, right? They have these benefits through these managed care companies. If he didn't work with them, he would have no business, really. 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. 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.
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 work for them, and how's 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. Does that help? Maybe I can just see if this works. Can we get the microphone to work here for myself?
Maybe this is better. So maybe I can just add on the question on margin profile of this business. It probably goes both managed care and the Spec savers and the like.
I mean, we're, of course, conscious about that 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 Oliver, next.
Hi, good morning. It's Oliver Metzger from Oddo BHF. Two questions. The first one is about managing complexity. So you mentioned that more people work in a horizontal way instead of a vertical organization. So I assume that really bears a lot of complexities. 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 a big opportunity. I understand from a break-even perspective, a 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? Thank you .
Maybe this relates a bit to my opening. I promised to answer your question, but I propose I do it towards the end of the presentation because you will have a presentation 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 you look on these employees, the majority of them are sitting in those two 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 and 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, certainly for 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 callout 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 period. It's something that's also a profitable business and also supporting cash flow.
So we are very committed to the 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.
You may add. Oh, go ahead.
Maybe I'll just add one thing on the OTC side. 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 500,000-1,000,000 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 your comments a lot about the market growth measured in value, and then you, I don't know if it's a 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 at its peak yet. And then how you expect to see the split between volume and value on ASP in your aspirations going forward? Because it has a cost to do partnerships, I guess, on the pricing.
So I think we think about things a little bit in the volume side because we have actual data on that. We know those numbers, right?
When it goes to the value 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, or what are you doing, Specsavers?
Yep.
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 manage one more question, otherwise we'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 you. And I'll do two questions, so apologies for the delayed lunch. Yeah, 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?
Yeah. I don't know how much we talk about ASP. I think you'll give it a shot. Yeah. So I think it depends on channel. I think there has definitely been price pressure over that time. The growth of managed care, as an example, for sure has put 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, what was it? The Beltone.
Beltone, yeah, yeah. 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 talk about those multi-generational that are really wanting to grow and expand that business. And so we work very closely with them. 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, I mean, we're 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 to the ASP, we are more okay with that. Because in some periods, some channels might grow much faster than others, and 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 in ASP is something that's very high on the agenda. Thank you.
And then we have a short break. So there will be food outside.
We only have 15 minutes. Thank you for that, Scott. We have 15 minutes now for a short bio break. There'll be a longer break later in the day. We'll meet up in here at 12:45 P.M. Welcome back from the short break. I know it was too short, but we'll hopefully get a longer break later in the day. It depends on how many questions you'll have, so also just refrain from that. The next session is where we'll deep dive more into the divisions. We'll start with the enterprise division. 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've spent the last 20 years of 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 asked me is, "Why are you here? Why did you choose GN?" The answer I gave is that I believe this company was the future, that the ideas and the technology in this building could fundamentally change the way that people live and work. In many ways, my presentation today will be about the realization of that future, that future that actually came to be. We're going to talk about that in three 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'll take a look at a new type of a future. Maybe that's easier. No problem. Can you hear me better now? 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 premium audio and video solutions to enterprises of all sizes under the Jabra brand. So two keywords 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.
Even beyond that, you've got a software layer from our partners, Microsoft, Zoom, and Google, where you connect the device 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? Firstly is 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 speakerphones with the Jabra Speak range.
There's around about nine million Jabra Speaks out in the world from Sydney to São Paulo and everywhere in between, in boardrooms, in personal meeting rooms, in briefcases. 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. I said 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. They usually buy it from Microsoft, Google, or Zoom. 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?
80% of Fortune 100, 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 Ann, who controls or owns a rather large budget across global sites.
Or they can be somebody in a small or medium-sized enterprise whose 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 are 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 I 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 go to each meeting room to update the software. So I need a system, an 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 that's 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 fast to ship and fast to service.
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. If it's a headset, I expect people to use it all the day, so I need it to be comfortable. This creates 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. A very specific category. 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? Let's look at the breakdown of our enterprise revenue looking at last year.
So the first thing to see here is over three-quarters of our revenue comes from enterprise-grade headsets. And enterprise-grade headsets are broken into three parts: 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 a bank. So when we talk about our call-centric category, that's not one-for-one 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 a unified communication platform. They work in very many different sectors. Accordingly, it's pretty logical that we would service very many different sectors as well. So that's the fly-in. Let's now dive into a little bit of headsets and talk specifically about those three headsets categories I talked about: the knowledge worker, call center, and the frontline worker. Let's talk about the knowledge worker.
That's the biggest single category. Over 500 million knowledge workers out in the world. Who are knowledge workers? Well, they're 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 three places over the course of a normal working month: the office, home, and a third place, the airport, perhaps. I bet 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 rate on the next slide and a three-year replacement rate. Our latest data, hot in this week, talks about replacement rates about two years and 11 months. So three 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 three years. And you're using that headset for customer service. The specific call center segment is declining for reasons that I guess are fairly straightforward.
We see a 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 are 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 identify four key segments within the frontline worker: hospitality, healthcare, 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 10-15 years ago.
We see a 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. We see a growth potential there. If we look at this slide, we can see, I guess, fairly clearly the penetration rates and the replacement rates are quite important to how we see the market developing in the future. Let's spend a little bit of time talking about what we know about penetration and replacement. Let's focus on the knowledge worker. That is the biggest segment of the market.
So this is where it probably makes most sense to focus our time: just over 500 million 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, the single most important thing is, "Is it certified in 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.
Then the biggest category we have is actually what we describe as non-use, people who are using a UC client but don't use any device. They're simply talking into their PC. If this is the situation today, what are the drivers that can affect replacement rates or penetration rates? The strongest impact is actually macroeconomic, and by which I mean factors that affect businesses' ability to invest and grow. When we speak to IT decision-makers, the number one factors in whether they will deploy more or less headsets or video are around, "Do we have loads of new employees? Are we re-equipping our offices? Are we moving offices?" Those are key drivers, of course, strongly linked to overall business growth. The second key drivers are new technologies.
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. 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 endpoint or 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. 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 a drive of sustainability.
We get to this view of the enterprise headset market, which is a CAGR of 3%-5% between 2024 and 2028. 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. ASPs, we anticipate to be relatively stable in this period, but that does not mean there won't be price pressure. There'll be price pressure in individual segments, likely in the low end, but we believe this will be offset by innovation delivering value to enterprises. 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, contact 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 a 30%-33% volume share. That means around about seven out of 10 heads do not have a Jabra professional headset on. They have something else on. And that 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 input into it, 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. They 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 new form factors can help us increase penetration and replacement and appeal to new audiences. Not all penetration is equal. 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 the Middle East and Africa and India. That's the knowledge worker segment. Let's now look at the call center segment. 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's 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 call center agents and you're on the phone with a customer, Engage AI gives you a sense of both your customer's 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 call center agents.
In our earlier proofs of concept 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, a 30% call length. So for those calls that will remain in the contact center, they will be of higher value, and we have a software solution to make them better and shorter. Deploying this strong software solution won't just help us in software. It will help us in hardware as well. It'll create a sticky nature for our hardware in the contact center. The final category to look at is the frontline worker. 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, UC clients perhaps on mobile devices to enable frontline workers to communicate, and those frontline workers to need the right headset to be able to unlock the value of the software. What's the right headset in a frontline environment? It is something specific. It isn't something you can just buy off the shelf in Elgiganten. Firstly, it needs to operate and work with the software platform you've bought. It needs to be durable. It's going to get knocked around a lot. Probably you're going to need a replacement battery because more than one person is going to use that device. So a device engineered for a specific use case. 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 three segments. The first is what we describe 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 is standalone 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 touchscreen, 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. The final category is a category that isn't video at all, which is Speak, a category which I said we were market leaders in. We add Speak in here because Speak, in many cases, has lived in the meeting room or the boardroom. Of course, increasingly now, with this prevalence of hybrid working, people don't just expect audio in a meeting room. They expect video as well. This is a category where we expect to see some decline and replacement by all-in-one video and audio bars. In those two key room categories, bring your own device and standalone systems, we do see a significant amount of growth, and it's primarily driven by underpenetration.
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 three or four 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, and nine 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, the growth of hybrid work, cutting-edge technology advancements, and particularly sustainability. In a way, video solutions are an inherited sustainable solution preventing or encouraging you not to travel.
Here, we see a much higher level of growth, a CAGR of 10%-12% from 2024 to 2028, and that's driven probably by one simple fact or one simple anomaly. On one 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 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, underpenetration is there. That's fairly straightforward. There's a growth market and ramp for us there. Our partners at 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 Ann 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 than explain it. I'm going to show you the video of how generative AI is coming alive now in our PanaCast video products. You have two live AI use cases there. One is generative AI transcription into Copilot, and the other intelligent meeting spaces using AI on the edge to denote the edge of a meeting. I said a video is a better way to see it than me explaining it, but actually, the best way to see 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 dive 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 three 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 environments 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 companies find it difficult to solve alone. We need to work in conjunction with our alliance partners because the reality is our enterprise customers are using systems from 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 three 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, 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 live knowledge workers in the market telling us about their experience of using just the laptop, using earbuds, 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 Evolve2. 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. We're going to support that this year with the rollout of a new device management system called Jabra+. Jabra+ 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+ window, but maybe I work 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+ for Partners is intended to do that, where we make the SDKs and APIs available so you can integrate Jabra functionality into your single pane of glass. We talked also a little bit in the megatrends about personalization, people having their own expectations. The middle part of this chart is for the knowledge worker, Jabra+ for Desktop and Jabra+ for Mobile. That enables me to optimize the settings to 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 three, 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 choose from the three 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, Lenovo and Crestron in particular. With Lenovo, for example, we've developed a co-branded version of PanaCast 50, the 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 we describe as pull and push. We have a dedicated high-touch salesforce, 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. We have this broad channel network. We have an indirect model where we sell into distributors. They sell through to resellers, and that broad branch of resellers, 20,000 resellers, are our extended salesforce. 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 pull from the large enterprises, go to the channel network, and channel network creates 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 co-develop 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 customer's 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. 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? This is what they found. Every day, 572 million workers spend an average of two hours in meetings, amounting to over 5 billion hours of collaboration every single week. But how does the technology we use impact our behavior in these meetings? We conducted a study at the London School of Economics' world-leading behavioral lab in order to better understand our biological and behavioral interactions in meetings.
When everyone is using professional Jabra technology, trust increases by 16%, and the quality of input rises by 47% compared to using a competitor's video bar or built-in laptop audio and video. Remote meeting attendees using a Jabra headset and camera elicit 22% more trust than those using a laptop only. Meanwhile, using a Jabra PanaCast 50 increases the quality of input from the room by 56% for all remote attendees. Upgrade your employees and meeting rooms with professional technology from Jabra and elevate your collaboration and productivity to make every minute count: the world's leading professional audio brand for work and life. So the obvious question now is, if the meeting quality is improved to such an extent by PanaCast 50, why was that revenue chart I showed you the video sliver so small?
The short answer is that experience has not yet been made available to enough meeting rooms. We very consciously build a portfolio plan starting on the bring-your-own-device segment, the simpler plug-and-play part of the portfolio. We now want to extend those technologies into the room systems - that's the middle pillar on the slide that I showed you - and into small and larger rooms. The PanaCast 50 is currently optimized for a medium-sized room. Our plan is to take that experience broader. Our immediate objective is to roll out our Jabra+ 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. Through software upgrades and what we call value packs, we introduce 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. The team outside can show you that again later. I promised them I would advertise their products and demos, so please try that out. We'll roll out our device management system this year. We'll enhance our portfolio this year. 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. When we talk to IT decision-makers, we discovered 92% of them are decision-makers for headsets and for room solutions. 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 add a video solution there?
That's reflected by the penetration we're beginning to get with some of our larger customers. Over two-thirds of our top 300 customers are now beginning to trial our video products. We've talked about customer-centric innovation. We've talked about go-to-market. We need to talk 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. Guess what? We have one 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 for 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 able to always have an 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 I think they call hallucinations in the 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 earbuds and a general headset. It's not our data. It's from a partner of ours, NICE inContact. They are a cloud contact sensing 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 6% of what you say, it's not going to be able to help you very much.
A world where 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. 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%-5% in the period, and in video, 10%-12%. 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 into our software partners, we need a powerful go-to-market model, a global go-to-market model to enable to drive those solutions into the market where we speak directly to and listen with the world's biggest enterprises but 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.
With that, I think I'm going to invite Rune, Peter, and Søren 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, so.
You didn't do a good job. That's how it is. We have sort of 10 minutes for Q&A. Let's start with Niels.
Thank you. 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 one. That would be my first question.
Yeah. 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 headset speaker 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 this meaningful growth ahead of the market.
And then secondly, in the frontline worker segment, as far as I recall, you only have one product available in this category. Are you planning to extend your product offering in this faster-growing category?
So yes, right now, we have one 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 Maja Pataki. So let's see whether we can get Maja up on screen. Maja, please unmute yourself and ask your question.
Yeah. I'm unmuted. I hope you can hear me.
Very well. Thank you.
Yeah. I can hear myself as well through the echo. 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. Yet if I go back to the 2022 slides that we have, we're having the same number of knowledge worker state, 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 pricing side, or what's the difference?
If it isn't penetration rate, why do you think growth rates are significantly slower now? Thank you.
Yeah. I think it's as I said, we expect some sort of stability in ASP. I think if we look at the market now, it's a very different position to 2022. I think we've seen when we're looking at developing our growth predictions, we're looking at our own first-party data. We're the market leaders, so our first-party data is pretty good. We're gathering data from third parties, both on sell-in and sell-out. I think if we look at the performance of the enterprise headset market over the past four quarters or so, we see consistent negative growth.
So while we think the underlying market is strong and we can see potential growth with improvements in macroeconomic conditions later in this year, we believe the 3%-5% growth is what we might describe as a realistic base. Realistic because it's based on the strongest evidence we have right now and a baseline that we think is logical for the next four years or so.
Martin?
Thank you very much for that.
Martin Parkhøi, SEB. Just on the split between video and headset, maybe on the R&D side, what are the investments now, roughly, seen on these two areas? And then secondly, even before COVID, we saw in 2018 and 2019 more than 20% organic growth in audio. Based on, I guess, when we see the market shares or the market growth, it was significant market share gains.
How have the competitive situation changed post-COVI D , do 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 three Evolve2 new products to help us stimulate the business, particularly the Evolve2 65 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 Søren 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 2022 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 strengths 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 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 two key territories where we see potential in the period.
I can just complement there also from a—I mean, I think we share that in different shapes and forms also, 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 is 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, as one of the industry leaders, further drive the industry forward. I think the bigger growth opportunities are, as Calum lay out, 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?
We seem to believe, together with our partners, that it's starting to come to a time where it's probably going to happen over the next few years. You never know, but it is a thesis we have, and something we certainly actively are exploring, what's the right approach here to participate.
Let's do Oliver, and then we end with Ron again.
It's Oliver Metzger from Oddo BHF. 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 the supermarket 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 with 35% in value terms, 50% in volume terms. Sorry.
50% in value. Yes. How to think about the total addressable market because some parts of the markets will not be addressable for you just because of price, or also some users will continue to use 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 worker. So the market share we described, the 50% and 33%, relates to that 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 non-use 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.
T hank you.
And then Ron again, very short question. Then we'll get a short answer.
I'll just make it one, I promise. It's very hard for me, but I will just make it one, which is obviously 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 you three to answer? Thanks.
Yeah. I can say that one. I think it's evident that for both of the frontline worker and the video, it's, 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 via Stefan 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 Calum did a fairly good job at telling you all that there is 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, Søren. And we need to move on. Otherwise, we have an issue ending it on the day. So thank you, Calum, for the enterprise side.
And thank you, everybody. Please try the video solutions in the break. Please feel the experiences come alive and find me anytime in the remainder of the day. I'm happy to talk about any of this at great length.
Thank you very much, everybody.
Good. And then the next session, we'd 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? Good. Yeah? We've got the energy? Yes? Awesome. All right. So we're going to get into gaming. Very disturbing to see this big picture of you up there. But I've now been at SteelSeries for almost 10 years. In four 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 would actually sell those games to the neighborhood kids.
And that's when I realized that I'm a gamer and I'm a capitalist. So for me, SteelSeries 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 consumer division, we've got two businesses. We've got the SteelSeries business and the Jabra business. We've got a couple of other brands, but those are the two key brands. Besides both being B2C brands and sharing go-to-market strategies, they also have a lot in common in terms of their 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, 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 two 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 up there, 525 awards, which we were really happy with. In 2023, we beat that record.
In 2024, we're looking to beat it again. For us, the awards are really, really nice, right? For us, the awards are 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. Our business there is true wireless earbuds, largely. We've got other businesses, but true wireless earbuds is the biggest part of the business. We're making products that actually make a difference. You see it's recognized broadly as some of the best earbuds in the market. Now let's do a little bit of a deep dive on consumer, and then we'll do it on gaming as well. 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. 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 2024. The market is still correcting. We still haven't swung back to growth. 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 is absolutely dominant in this market. That player owns two-thirds of the market.
So we are trying to compete for the remaining one-third of the market, which, by the way, is still a pretty big market, but it is one-third of what you're seeing up there. We're competing against the likes of Sony and Samsung, both of whom have pretty big entrenched ecosystems. 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? This is the challenge that we've undertaken for the last year. We've made a lot of progress. 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 earbuds, great sound, great active noise canceling, but outstanding comfort.
Anybody tried the Elite 10 as yet? No? Oh, thank you. Thank you, GN folks. But again, I would highly encourage you to try them. They're outside. Elite 8 Active, the toughest earbuds on the market. And it's not just marketing fluff. 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 two 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, number one 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. 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. 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. 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. 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. That's probably not a newsflash. We've seen some nice growth there. All of this is good. I can see from the happy smiles on everybody's faces, you're going, "This is awesome." But we're not done yet. 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? Yep, we all have those, which you basically only use to store the earbuds and charge them, right? Well, there's 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 Dune 3. You're excited by that, or Dune 2, I guess. There's no 3 as yet, but 2. And you're excited by that. The bad news is it's the crappy airline sound.
Well, we can fix that for you because you plug in your Gen 2s, and all of a sudden, that sound is going to be fully spatial. Same with treadmills. I don't know if you watch videos on your treadmills. We upscale the sound there. Some of you have TVs that are probably not the latest TVs. We can do the same on your TV. So it basically takes pretty much any sound source and converts it into spatial 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're 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 see some familiar faces. Some of you have been following gaming for a little while now, and some of you have not.
I'm going to give you a little bit of an intro to gaming. 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 dollars. We've sort of mixed in our slides dollars and DKK, but that's actually dollars. As Peter talked about this right up front, some of those stereotypes about gaming being for young males, that's not true anymore. 45% of gamers are women. Even when you look at really hardcore first-person shooters, now over a third of those gamers are women, which is great to see. The average age is 31. It's not teens. It's a pretty broad range of age groups. A lot of people who are retiring are 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. One of the key drivers of this business has been esports. Esports has really become massive. It's been massive for a while. 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 pairs. We think pairs is a higher quality number to look at because pairs are people who are actually paying for some form of gaming as opposed to players who are only looking for free games.
So if you look at the number of pairs 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 in Steam, you see that really nice COVID bump in 2020. Now, you will notice that there was never a dip. 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 was one of the questions. And what we'd 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.
They reformed their teams. Now, during the week, every week there's a designated gaming night. 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+ hours a week. That number is, depending on which study that you see, it's 50%-100% higher post-COVID versus pre-COVID. Long way of saying, the structural foundation of the gaming business is very sound. 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 three core categories that we play in, is only about a quarter 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 2020. You see that massive correction that happened in 2022. And then you see the stabilization that's happened in 2023. And now we're starting to see the peripherals market go back into growth. It's not going to be in high growth in 2024, but it's stabilized, and we're starting to see growth again. We've had about four 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.
Gaming is not just about an activity. It's a highly engaged, highly involved form of spending your time. So gamers, 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 on 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 hardcore gaming really accessible. So before you needed 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.
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're seeing this collision of two worlds, right? So 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 a huge F1 fan. So one of the things you'll notice at F1 races is almost every F1 race has an esports component going on. So there's the physical race going on, and then there's the esports race going on simultaneously.
We're very happy to sponsor the Mercedes-AMG Petronas esports team. They're now going to share with you why gaming audio is so important to them being able to win.
For us, as sim racers, sound is extremely important. In real life, you feel the car sort of move under you. Of course, in a sim, we don't have this. We rely on other aspects. Sound is a very big part of that. The reason we use the SteelSeries Nova Pro here at Mercedes is because we've got a great level of customization available to us. We've got noise canceling where you can stay very much focused on your driving. During a start, you need to hear competitors. Another thing that's very important during a race is hearing the engine sound, put that connection with the engine revs to find the right upshift moment.
So hopefully, this sort of gives you an idea of how just gaming, going into esports, going into these big, major sports is going to drive the category. The way we have won at SteelSeries, 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 is either a gamer or is a gamer wannabe. So we have debates on which one you really are. 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 Steelheads, which is what we call ourselves everywhere.
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. That allows us to stay one step further. 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 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 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+ 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'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 three 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 SteelSeries. The company started by creating the very first surface for gaming professionals. It was called the Icemat. There are many events that I go to where people come with their Icemat to show that they still have their original Icemat. The very first gaming headset ever made was SteelSeries. The very first mechanical gaming keyboard was SteelSeries. The very first mouse with an onboard processor was from SteelSeries.
The very first iOS game controller was from SteelSeries. The very first high-res audio system for gaming came from SteelSeries. The very first adjustable actuation switch in gaming and I know that sounds like that's super techie, but it is the standard now. Most gaming keyboards now have adjustable actuation. That started at SteelSeries. 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 Sonar does is it provides unprecedented levels of audio control. And it gives that to gamers. It has the first parametric equalizer made specially for gamers. And I'll talk a little bit more about that. So a ton of firsts.
GG is now at 3.5 million monthly active users. It has grown a lot. For those of you who were here in the 2022 meeting, 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 are what we call acquired users. We call them acquired because they did not come to us by buying SteelSeries 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 pace. Every single month, we are converting these folks into SteelSeries owners.
So GG has become this amazing platform not just to provide the ultimate optimization for your SteelSeries 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 lowlights, but the highlight of that game to your friend group immediately, right? It was really, really hard to do till 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 two 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 Aim Trainer, which if you go to our booth, you can go and try 3D Aim Trainer, see if you can beat my score from this morning. I bet all of 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 is to tightly integrate 3D Aim Trainer with all our products.
You can almost imagine the power there of products that 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, Sonar for Streamers, is really the star over here. We tried to solve real problems for streamers. 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'd 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 sound 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 three different audio streams. I want control over every one of these individually, and nobody had ever done that before. To do that, you needed three or four different apps. And we solved that problem with Sonar for Streamers. So let's look at the launch video. Actually, let's look at Sonar for Streamers in action.
Sonar is the all-in-one sound studio for your stream.
It does what you previously needed three or more apps for. You can master your mix, drag-and-drop apps, even AI noise canceling. Just listen to this. Oh my God. I have no idea what this sounds like right now, but it is loud. There are jets flying around me. And it's not like I can hear the AI noise cancellation. I just know that it works.
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 2023. Our headsets, the Arctis and Arctis Nova lines, are the world's number one premium gaming headset lineup. And what you can see is we've done that by 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. As you know, we weren't the only ones. It was pretty much every consumer electronics company. It still is a problem we had to solve. 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. Now, onwards, the margin starts normalizing. Promotional activity starts normalizing. 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. 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're benefiting from IT. We're benefiting from the R&D machine. We're benefiting from all these things, which is making it easier for us to be even more competitive. All right. I talked about ongoing innovation. Two quick examples. Number one is the 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 a 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 in 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 SteelSeries 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. It solves a real problem for them. I met a couple of console gamers, so I know some of you will relate to this. This is going to sound like I'm having an existential crisis, but footsteps don't sound the same. All of your footsteps are different, right? You can buy into that. Every game, the way footsteps sound 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. 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.
In 10 minutes, let's say you get bored with playing whatever it is you're actually 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. For the first time ever, your PlayStation gets 100-plus audio presets. Now you decide what you want to hear most so you can hear bad guys better and pinpoint critical sounds. Pick a protuned audio profile for each game and vibe to the soundtrack of you. That's the thing about glory. You don't just hear it. You feel it. 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. That's one of the other advantages that SteelSeries has developed over many, many years. All right. This is how we see the gaming rig. 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.
As we find those opportunities, we go in and we address each one of the things that are in front of us. And if we don't find those opportunities, we wait. So we waited a long time before we introduced microphones till 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 at 5. I'm 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 to catch up with us on software development, on our grassroots marketing activity, and just the years of know-how. That gives me a little bit of confidence. It also means we've got to stay one step ahead, right? We just cannot give anyone an opening. 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. Number one 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. Thank you.
I invite my colleagues to join me.
Thanks, Ehtisham. I would be curious to know how many gamers you have recruited during your presentation. I'm betting you.
We have 10 minutes, 15 minutes for Q&As, after which we have a longer break. Let's start with Niels.
Thank you. 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. 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. I think the Gen 2s take it to the next level. We've got some other things in the works, right? We've got to get into that 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. 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. 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. To be able to compete with them, we need a ton of scale. We need to be able to do that pretty quickly. That's the work that's going on right now. 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, right, Niels. I'm not giving you the percentage of the channel that's DTC. But it's an important part of the business. 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 two machines are tied in. So the channel plays a very, very unique role in that we're not trying to have SteelSeries.com compete with the Best Buy of the world or 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.
I think Christian is next up.
Thank you. A couple of questions. So first, when we think about that overall 5% growth that you're seeing for the gaming business or 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?
Maybe also how you see opportunities that you've not yet exploited. So that could be 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 or it's a question for Søren. 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 timeline to get to that range? That's the questions.
I think you go ahead, Ehtisham, first, at least, and then on the margin. I can also support you on that one.
Okay. Great.
Actually, let's start with the margins one.
Yep. Fine.
I let Søren 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 GN, 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 in 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, Ehtisham, talk to it in terms of the consumer side, where part of the gross margin has actually been the mix, so the pricing uplift.
Whereas on the gaming side, I think we will definitely also turn towards our operations folks to improve basically the way we source at a more competitive rate. And that's why those two 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. And then.
The market. Drivers. The market growth. So if you take keyboards, 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 keyboards being significantly have 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 three 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 its 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, we see an explosion in wheels and pedals in 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 vallleys differ.
Great. Thanks.
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 our lovely colleagues. We will be back here at 3:15 P.M., so 45 minutes each of break right now. Thank you, Ehtisham.
Thank you.
Thank you.
All right. Welcome back. Hope you tried a lot of our products and our experiences out there. Now we're done with the divisional focus. Now we move to the functional focus. First off is an innovation theme, both covering innovation, also some Generative AI within our IT side. Then afterwards, we will have Stefan covering some of the operations, after which Søren will end the show on financials.
We have roughly an hour planned now for the innovation parts. And there will be a short bio break after that. But with that, Christoph, the floor is yours.
Good afternoon. Are you still fresh? Yes. Yeah. It's a lot of information today, and especially for those ones who had 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 learned 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, yeah? So my name is Christoph Schmidt. I'm the Chief Research and Development Officer at GN. My background basically is I worked in different tech and medtech companies.
My mission was always one thing: to innovate and to basically grow companies. 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 I should join GN or not, basically, I saw there were two growth opportunities from an innovation perspective. Number one, I looked at the hearing aids. Seemed to be very good technology but not performing to the full market potential when it comes to sales. 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. So far, my time at GN has been quite exciting. I was quite involved, as you can imagine, in launching OMNIA, Nexia.
I'm super, super happy, of course, to see Scott presenting how sales are going up and how well those products perform in the market. Then also, since last year, I had the opportunity to really join and head R&D when we decided to join forces across and basically unveil the innovation potential. But I must tell you, as much exciting as 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 are three topics we want to talk. First, a 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're almost missing a continued 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. I will hand over to my colleagues Brian and Anne. We will do a deep dive into AI because, of course, as everywhere, we see a lot of opportunities moving forward with this topic. We want to show you our plans also moving forward there. I just want to shortly follow up on the mega trends that Peter has shared for us. Now, from an R&D perspective, there are basically two 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 are 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 tell 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, Microsoft, Apple, you name them. What you see with our product and what is common 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 two 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 our promise, basically, and our purpose to bring people closer.
Now, how do we do this from a global R&D operation standpoint? First of all, we are organized in five product lines that align with our three divisions. I will show you this logic later on. We have shared functions: research and technology, software and processes, where we bundle our investments and share them across the product lines. We operate at eight sites. When it comes to the selection of our sites, there are basically three criteria. We want to be close to talents, right? Because, as you know, finding the right talent for an R&D organization, this is the number one of success. Where do you get the right knowledge? It's about being close to our customers to really understand this.
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. 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 talents 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 US 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.
Also important to say, in Poland, this is where you get very good software and IT talents. We have a software and IT site there. 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? Basically, there are three 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 2, 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 too late, and at the same quality at the right quality. This is where it comes down for customer-centricity. And this is what we ensure throughout our entire R&D operations. Co-innovation about 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 there's partnering. We took this in R&D to a next level because there is a multi-dimensional approach to this. And I will go on a deep dive into this.
And then, of course, the third item, as I told you, to really unveil the innovation potential by joining forces across our divisions in R&D and bringing those innovations to the markets. So those are the three 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 five product lines. And those five 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, it's 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 to do one thing.
You wake up in the morning, and you think about how can you grow and innovate the business. Then you go to bed. The next day, you do the same thing. So really, by this, we ensure this customer focus. 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. By this, we ensure also moving forward that we will keep that edge. So we organize 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. Let me explain the reason for this. I guess for a video system, you understand those are those bars 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. Then I also want to highlight for you for the hearing aid. We have the capability. If there's an opportunity for us to differentiate with chip design, we can also do this ourselves. 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 to build the devices smaller. As Scott says, this is a number one criteria.
So we design our chip there. This chipset basically is the foundation for a lot of the success that Scott has talked to about with our Nexia platform because what we do there really good is two things. It's our organic hearing philosophy. What does it mean from an R&D perspective? It means that we really understand the customers. We really understand how the brain works. We allocate our research exactly to those topics. We closely link our research activities also to the development. 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. 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 numbers, 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 in 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 adaptation for the different use cases. But the mastery to get those technologies under control is very similar. So we can benefit to implement that across. Just to show you an historic example, I hope you have listened to the Auracast demos, yeah, 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 worked 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 goes really broad, right?
This standard is now emerging that moving forward, you can watch on the iPad with your kids and have a multi-stream, right? So it became a very broad standard. The good thing about it 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.
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. Then also, we worked together with the different smartphone PC manufacturers on the hearing aids. So we made it work. 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. 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.
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. 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 gets 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. 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 a hardware and with a 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 ours. Partner integration. I mean, all of your colleagues have talked to that.
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 with this as a technology agreement with Cochlear to bring bimodal solutions to the market. We started this in 2011, and we renewed this in 2018. What we have shown continuously is that we were able to bring really groundbreaking innovation together in this collaboration. In 2012, Jabra basically collaborated with Microsoft on the 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 a Skype and a Jabra headset. Then, of course, we were working on standardization for hearing aids. We were the first hearing aid. We were working together with Apple basically on this connection. Then we moved on to Android.
Just recently, in 2023, we again worked together with Microsoft to make sure that our hearing aids directly connect 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 on AI 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 a 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 connection to an enterprise headset, you make it to consumer, to gaming, you make it to hearing aids. 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 a 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 roadmap to drive innovations 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's a network to partner into many, many different directions. And this gives us multiple levers, 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 and 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 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 in terms and that's why they 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 design it 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. 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, so make sure that you invest into the right things, but also make sure that you minimize your risk, yeah? So what we started from day one when we joined together the R&D organization, we established one common process across the entire organization. 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 one, we start with this one.
Now we evaluate those portfolio across a few criteria. 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 three 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 multi-dimensional 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. To conclude this, I would like to take you on a short tour through our labs where we develop those products, if that's okay for you. Yeah. So always impressive to see what it takes to develop a high-quality device nowadays. 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'd like 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 1990s, 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 a hearing aid was in 2003 when we started to put in environmental classifiers. So would we argue back then that hearing aids were intelligent 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 where you feed machines boatloads of data, and you use a lot of compute in order to learn very complex patterns in 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 will 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? A subclass even of deep learning is the generative AI that we are seeing now with Copilot and large language models. And we'll talk to later how we use that.
So why I'm talking about all this not being AI, it's because it's important to understand that all these things are just tools for us to build better products. There's no magic fairy dust. We can sprinkle on our products that is AI on the box, and then it just gets better. There's a lot of hard work behind what we are trying to do here. 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 collect, all the soundscapes that we are creating in the great labs that you're seeing up there in order to test these systems, they're 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 two 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 heads? How are the heads 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 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 aids, headsets, and even in rooms, it's stuff like that that really 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 clients that we talk to, the video systems and the headsets talk 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 are doing, influence what they are 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 can ask, okay, so what is now coming?
A lot of these things that are hot right now are on generative AI. We are not the only ones 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 on 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. 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%-96% correct recognition by the speech systems.
If you had bad input or there was noise in the background that was not filtered out at the edge, this dropped close to zero, 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 does 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, Okay Google do this some years ago, and that didn't really work. And that's true. And that was on the top of this hype 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. A lot of this will really change the way that we work. The ones of us who have been using the Copilot technology for some time now will know that this is actually a fundamental change in the way that we work. 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. Can you hear me? Okay, good. All right.
This is me. I'm Anne Fogelgren. I'm the Chief Information Officer for GN. I've been here for three and a half years. I have one overarching theme in my career, which has been various positions, and it's all about customer-centric IT, digitalization, and innovation. But I'm not going to talk about that here today. I'm continuing what Brian started to talk about, and that's AI in a broader sense. I will zoom in on the generative AI aspects of this and what it means for us in GN. I will take you through how we have successfully launched generative AI in GN and also talk a little bit about what our approach in the future is to actually secure that we actually generate value going forward. 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 were, 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 2022. 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 version of this. This is ChatGPT 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. 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%-40% on creating content. Also today, we have about 25% that has actually adopted this. This is something that we see rising every day. The better we get in launching the new solutions, we can see that this is something that's going up. We have approached this and approaching this through three phases. The first one, we started in 2023, as I said, and that's the fundament of this.
We started on efficiency and made sure that we actually had a platform that was secure and ready to go out in the organization. We're still working on that. It's the basis 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 3-5 years.
Here we can see indications that it will be definitely new business models coming out of generative AI. This is something that we are focusing on heavily. I will give you some examples on how we've been working with this in GN. I will start with showing you two examples on how we've been working with generative AI on an efficiency focus. It's important to say that we got about 100 requests in 2023. It's a lot of focus and interest in GN on this. We delivered 20 solutions during 2023, and I've selected two that it's 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 a 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 is giving us a 50% efficiency gain on this solution that we have in production. This was one of the first ones we launched in 2023. Ehtisham was talking about how important content is for and content contributions is for 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. As you probably know, developers are perhaps not the best communicators in the world. This is something that helped them package this correctly and present it 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 the SteelSeries team. You can see that the power of this platform that we have introduced in GN can give endless 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 two 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 Plus case with us, and we have the Audiology Assistant case with us. These two 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 Plus. 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 a cleaning staff or a maid service that we have run this.
So here you take the physical product, which is, as Callum described before, very critical for a generative AI perspective, that we have a very clear voice and that it 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, in this case, the hotel to find the most optimal path to come through the service that day, 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 Jabra Speak 2 unit, 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. For all of you that know a lot about hearing loss, key is to be able to see the expressions from the consumers' or customers' faces in order to make them both feel safe but also be efficient. This service stitches data from hearing tests together with the attributes. It could also be other different data sources that it's actually bringing in to enhance this. At the end, it gives you a recommendation to the audiologist 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 a 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 the 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 secure an 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 have 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. Sorry. 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.
Hi. Thank you for taking my question. 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? Thank you.
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 dualities 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.
Thank you. A question for Christoph. So do you envision your R&D budget to grow faster than the anticipated 5%-8% organic growth of the GN group in the next few years?
Basically, we go with what you see in the budget, basically. Is that higher than 5%-8%?
To help you, Christoph, I know Søren will touch upon this in the closing. So you will get that answer in Søren's closing presentation.
So you get the answer there, but there will be coming a lot of productivity and innovations out of this, right?
So that's what I can reassure you, a lot of value from this investment. Thank you.
I think we have Christian here up in front, and then Veronika.
Thank you very much. You talked about this partnering philosophy and in particular these joint development partnerships that I'm guessing you at least historically have had, particularly on the audio side, on the manufacturing side there. What are the opportunities to do something similar on the hearing side, so actually leveraging external manufacturing partners more, also in the product development?
Is this something to Stefan, or probably? I think the two parts of the question, both is development partnerships as well as manufacturing, outsource manufacturing. So, Christoph?
Yes, of course, the development partnerships. I mean, you have special requirements in the hearing. That's why normally you don't have so much options.
But the good thing is, I mean, since we have that network, right? We can basically, of course, continuously evaluate, is there a partner that fulfills those requirements? And when there is a partner where we believe we can benefit from outsourcing, we go for it, right? I mean, that's the beauty of the system, right, that you basically see it, you compare it, you talk to a lot of suppliers, and then when you basically see there is an opportunity that somebody can do it better than you or cheaper, basically, right, in this mostly this time, then you go for it. But of course, it's still a bit special requirements on the hearing, so not every supplier would automatically basically qualify for that.
Makes sense. Thank you.
I think we have Veronika.
Excellent. Thank you. Two questions for me, please.
The first one is just on the rationale for continuing to develop your own chipset for the hearing aid business, what your thoughts are there in longer term as you fast forward in the industry. Do you think that's a trend that continues? And then my second question, and apologies, it is on hearing again. But obviously, we've heard a lot from your competitors about integrating sensors. And so I'd love to understand how important that is as a technology for you guys. Thank you.
Yeah, very good question because this is, of course, as you can imagine, also questions we ask ourselves on a regular basis. And we, of course, also evaluate, right, exactly, is there an off-the-shelf component or our own development?
We can do this quite thoroughly, right, because as you can see across those verticals, I mean, we can compare, right, and we know where it's driving. We conclude, and for now and also for the foreseeable future, that there is a competitive advantage of having a special hearing aid chip, yeah? And especially as I highlighted with our chip technology, I think we are really well prepared, right, because we have this modular approach, basically, where we can basically spill off products fast and also have certain lifetimes of those components. And it's quite well also designed for our future innovation needs. So we see this foreseeable as a different or foreseeable future as a differentiator then. And then the second question, sensor technologies, yes, of course, it's important for us. We also deploy it already now, right, next year.
I mean, it's one of those, you know, Scott told you so many ends, yeah, but he didn't complete all of them. We use the sensor right now also. We believe you have the most benefit in the use case when it's really usability to pick up your phone calls. We have very good feedback on this one. We are also, of course, seeing moving forward more use cases for sensors to come. So I think we are making good progress there. But also in future, I think that will be an interesting area for us to innovate.
And maybe to add a little bit to that, I think that's one of the areas where we have seen very good cross-collaboration also within the front-end development because a lot of the use cases that we see in headsets for these sensors and the way they are deployed will be looking very much the same for hearing aids once we're able to shrink the technologies to that size.
Any final question? If that's not the case, then we will have a short bio break, and we'll be back here 15 minutes from now with the last two sessions.
No, you will.
So the last two sessions for today are how we can drive agility and scalability in our Asian setup with Stefan, and then Søren will conclude that. We will do a short Q&A after Stefan's short introduction on the Asian side, and then we'll continue with Søren.
So, Stefan?
Thank you, Veronika. So I guess you've heard my name a few times today. I don't know if that is a good or a bad thing. I take it as a good thing. So my name is Stefan Bergfors. I have the pleasure of heading up operations here at GN. I'm a lifetime in operations. I've done pretty much everything over the last 25 years. Today actually marks the 7-year anniversary for me at GN, exactly today. And I've loved every moment of it since I walked in that door because it gives you an opportunity to learn, adopt, and actually prove that operation is key for any successful business. So today, I will go through over the next couple of minutes here what operations can do for the company, for our customers, but foremost for our shareholders. So it's under these three headings.
So, de-risking the company by optimizing our manufacturing footprint, but also how we optimize our manufacturing business model. Because at GN, we have this. We have both insourced and outsourced manufacturing, and we know them pretty well, both models. So that gives us now in the new setup a good opportunity to leverage them both and finding the optimal way. But also where in the world do we put these manufacturing operations? Driving agility, how can we meet our customer needs, our division's needs in the best way by being extremely flexible, agile, and come up with solutions that can actually drive stickiness and come up with stuff that the customer doesn't today understand that they need from a supply chain solution perspective? But in all honesty, I guess what you are most interested in is how can we drive scale going into this new setup?
But first, let me go through a few of the priorities that we are doing here that will lead to scale. Oh, sorry. First, it's our scale through the lens of GN. So we have 9 standard manufacturing or main manufacturing sites. 2 of them are in-house. 7 of these are main outsourced partners. We produce 34 million units annually. That's at least what we did 2023, so hopefully a little bit more 2024, right? That means that we process 250 components every second, 24/7, 365. We have 11 distribution centers, of which 7 of them also contain custom manufacturing for hearing aids. We operate these by having 1 global 4PL, but we also have in-house capabilities. So also here, we have a good mix, which means that we can learn from 2 places. And finally, we are supported by roughly 150 component suppliers.
You have seen a few of the names here. They go from big to small. So the priorities on how we drive this. So I'm actually very proud of saying that we now have an organization in place that is fairly future-proof. We have the right competencies in place in the right positions so we can start to really drive improvements and leverage the scale. That means that we are, in my book, almost consolidating operations across, going away from divisional focus to one GN focus across. There are certain pockets due to system limitations that we can't go all the way that we want to do. Of course, to harvest the bigger scale being one, the first thing you do is you consolidate your demand versus your suppliers.
This we have done by focusing on our sourcing procurement organization to look across and being fewer decision-makers to really drive this. As you heard Christoph mention, we are closely collaborating with R&D to drive Design for X. We're going for the highest one, and that is, of course, Design for Supply Chain because that will be our key leverage to be able to automate throughout the entire value chain, not only in manufacturing but also in our distribution, which means that we can customize and be more flexible closer to our customer base than through our manufacturing site. We are working, as you heard Scott say here, in all our system roadmaps. And that is, of course, also to be able to drive commonality, where commonality can be achieved.
We don't want to overdo it, of course, because we don't want to impose regulatory processes on an unregulated market as SteelSeries and the Jabra brands are. We can still be on the same system landscape to further drive the scale. It might seem like a small thing that we would like to go from paper to digitalization, but it's actually a cost-saving exercise. It's a sustainability exercise because the more you can have digitalized, the quicker you can do turnovers, the fewer mistakes are done in manufacturing, the better quality. Hence, it will be a cost improvement over time. Going back to scale and what we have done here. This is a live case. We take our mechanical sourcing area where before the merger, we had 37 suppliers for mechanical parts across the group.
The team was tasked to find the optimal number because actually, in all honesty, in some areas, we have actually too few suppliers where we need to increase competition to receive the same result. But here it was too many. So here we have consolidated our supplier base down to 15, and they have been fairly through a rigorous process of making sure they have the right capabilities, they are in the right places in the world, or having an investment roadmap that we can sort of build for the future. So this exercise led us on legacy products to save 5%-10%. But the good thing is for the future, we are actually saving around 20%-40% on the total cost. And total cost is not only part price. It's investment in tools and so forth.
I think this is a good case of showing how you actually drive scale in a fairly easy way. Going back to what we have done in the manufacturing area, for example, and what Design for Manufacturing can actually lead to. If we take the ReSound One versus ReSound Nexia, it's very much refined sort of design for manufacturing principles. I would say this is the first one we have done in hearing. One of the key parameters here is that we are trying to get out of manual soldering, which is a point that could be questionable quality from time to time, or we need to sort of re-loop them in production. Here, we're going from 17 of these points down to two.
And actually here, very close in the future, it will be zero manual soldering points in this product, which will increase which have led to that our manufacturing throughput time has gone from 28 minutes to 22. But foremost, as you saw Scott earlier today showing, that this has actually led to that our quality is much, much better. Finally, I get a lot of questions on supply chain disruptions. These are probably the three ones I've gotten most lately. That is our dependency on China. Yes, we are to some extent dependent on China. We have, over the last decade, I would say, we have worked on balancing that dependency. All our partners, or I would say the majority of our partners, close to 100%, have capabilities outside of China.
Of course, this is something that then we can use for the second risk, and that is if the tariffs are reintroduced or getting up higher in the U.S., for example, we can, within, I would say, from two weeks up to 12 months, we can mitigate most of that risk with the net zero impact to GN. So I think we have a fairly quick ability to mitigate those. And of course, lately, we have seen a lot of pure logistic disruption. Red Sea was the latest one. And here, due to that, we can both leverage our 4PL partner, which has volume and bigger scale than us, but also our own very good relationship with freight forwarders and the fact that we are running multi-mode. So we do everything from rail to sea to air, so we can always choose in between.
So we mitigated the Red Sea disruption fairly quickly with minimal impact to GN. So wrapping it up, I would say we are progressing fairly well towards harvesting low-hanging fruits in the synergy aspect. There is a little bit more to come. And we are prepared for the future. With that, I would like to welcome Peter and Søren up for some Q&A.
All right. Thank you, Stefan. Any questions for Stefan Operations? I think Martin was first.
I'm fast. Just a question on the hearing aid side. We have seen in recent years, at least, that there has been a little bit higher fluctuations in volume growth. And in this situation, supply has probably had a larger meaning. How do you think you're positioned, not just as GN as one, but also compared to competitors in respect to supply time to the customers?
I would say that we are fairly well positioned. We are not slower, not quicker than competition across. I think we are on the benchmark for that.
Any follow-up?
That was also fast.
Christian?
Thank you. I'll ask the second part of my question from the last session. So this opportunity for, say, aligning operations between the different divisions and maybe in particular, say, moving more of the hearing aid manufacturing to manufacturing partners, what's the opportunities there? Maybe also thinking longer term. So even if you remain on bespoke chipsets, wouldn't there be an opportunity for doing, say, assembly of hearing aids with external partners? So how are you thinking about that?
We have actually done benchmarks and studies. And the short answer is no. We can actually do it better and cheaper than any outsourcing partner that we have found so far.
Veronika? Thank you for that presentation.
Just curious on the 150 component suppliers, how much more can you trim that list down? And I guess maybe a bigger picture question for all three of you, as you've gone through this one GN integration process, what has been the biggest surprise on the supply chain, maybe positive and negative, so two? Thanks.
If I take the first question first, the 150 is probably optimal since we have a lot of varieties and a lot of different suppliers that we need, and you want to have competition. So I think where we are now around 150 is good. I would actually almost echo the answer I gave. Just what is the biggest surprise, at least for me, is that our internal manufacturing is very efficient and that although we have tried to prove that wrong, I have not been able to do that.
So that is, of course, a positive surprise. Not so many negatives yet, to be honest.
And I think if I'm to tune in here also, I think from a learning perspective, I think it's fair to say that GN in the past has been built in two divisions, right? And that also comes from a system side. And then you can debate. We knew that going into this, of course, that to get the optimal out, you will also have to align on systems. And it is, as expected, a complex world we live in. And it will also take time for us to get to the bottom of all of it. But I think we are faring in the right direction.
I think on the positive learning side, and you can then debate whether that's a negative or a plus, I think we have also come to learn that we can probably do and really do that now, even better integration from the R&D side, as Christoph told you, in terms of the development. So it's developed for manufacturing efficiency also. I think Nexia is the first one where I think we are starting to strike the right balance on that. And we expect, and that's a good thing we showcase, is now people see what good looks like. And I think that we can build on a positive side. And evidently, there will be components across all three units, as Stefan spoke to, that we can take advantage of. And that's a clear positive.
I mean, perhaps more reflection. I think the teams have come together very quickly.
You know about our synergies. We communicated the DKK 600 million and the DKK 400 million already this year. Our teams here in operations have strongly contributed to both the ambition but also what we delivered already. I think it is turning, what should we say, vision and thinking into reality. I've gone very well and relatively fast. These are, of course, low-hanging fruits. There are more improvements over time. Another reflection is just the scale. I tried to cover that in the morning. The scale comes together here very well in operations. I would say if we look on competitors we have on the hearing side, I would say most competitors on the enterprise side, as well in gaming as examples, if you looked on our combined scales as well as capability, relationship, sourcing power, we stand very well together.
Now when we're able to work together across the company, this is really helping us. It's helping us with margins over time, but also the flexibility and agility that Stefan talks about. I mean, it's not like we are not concerned or not observant to what's going on in the world and the China crisis and the possible tariffs and so on. The capabilities make us quite confident in our ability to navigate, basically. The last question from Oliver?
Okay. Thank you. Oliver Metzger from Oddo BHF. Two questions. One was from the morning about the horizontal layers, vertical layers of your employees, and managing complexity. The second one is about if I take into consideration the total volume between hearing and, let's say, the former GN Audio, the hearing aid numbers are, to my understanding, basically not significant compared to the overall units of GN Audio.
So is it fair to say for the hearing aid business, at the end, scale matters only with regards to quality, ensuring the best quality because the absolute numbers are irrelevant? And for enterprise, basically, it's just the scale game.
Maybe I take the first part of the question and Stefan, the second. Hopefully, you've got a little bit more insight now in how we're working across. And we in particular have showcased the innovation teams, R&D, together with key colleagues from the IT sides and now also operations. This is a significant part of our employees working in these functions. And of course, in addition to this, we have finance, we have HR, the core IT also cutting across. I would say that it's not like people are changing jobs every day and come up to job and not know what they will do.
I mean, many of them are, even if they are in these horizontal capabilities and functions of scale, they are somehow dedicated to a role or a division or so. So we have a lot of structure in how we do this. I think Christoph tried to talk that through in R&D where he said, "Here are some targeted teams working with different areas." Chipsets is one example. But then there are also some teams really working across. Even here in the shared capabilities, there are different types of roles. I think we are quite well organized. I think the same would true also in the operations area where we, of course, have one operation organization working tightly together to learn and collaborate and reaping benefits. At the same time, we, of course, have a dedicated site for custom hearing manufacturing.
We have another site that works with enterprise in an outsourced way and so on. So we think we are managing this quite well, the complexity, so to say. So it's nothing that worries us. On the contrary, we have broken down some previous organizational barriers and now can work more freely across and reaping some benefits from that.
The scale questions, Stefan, is it mostly hearing benefiting or how should we think about it?
No, actually. I think it's around 50/50 or one-third across all the divisions because all the divisions or all our brands are bringing different things to this scale mix.
So we have seen that it's equally spread, also the benefits, because what we know and what we have learned, for example, in-house manufacturing with GN or with hearing, has made us leverage our outsourcing partners in a different way because we know where the should cost should be. But of course, on components, we can bring the SteelSeries and the Jabra volumes in to get the prices down on certain elements of the components. So it's a symphony. All three brands are playing together to drive this scale. So similar benefits across, actually.
One follow-up. On Nexia, how many components or, basically, which share of components you use through common procurement?
Not so many common components, but a lot of common suppliers. And that's how you drive scale. Thank you.
Thank you, Stefan. And that concludes the operations setting. And Søren, you cannot sneak away.
It's the financial things now. So Søren will end the presentation for today with the financial aspirations for 2025 to 2028.
So now I'm the final one, basically, of course, trying to put this all together in a financial context. I'm so fortunate that I know actually more or less all of you in this room or at least met you a couple of times or many times even. And even online, I would also say I probably met many of you listening in. But for those of you who came in late, I'm Søren Jelert, and I am the CFO of GN. And hopefully, you will have an idea of the next topic. At least I take pride in believing that, at least.
It is true that we have also, from the beginning of the day, Peter spoke to it in his opening remarks in terms of what we are committed to. And from my side and also from Peter's side, it is clear that what we went through today is, in our mind, some very attractive markets that we now focus in. I think all of the people on stage today spoke about the word focus. So we focus in these three markets and where we are really good and where we can drive the markets our way and gain share. It is clear that we need to drive healthy margins. Part of that, also Stefan here spoke to, helping out from operations, but again, fundamentally also being in the strong markets.
We are in a position where we want to, of course, also generate good returns on the investments we do, not only in sort of if it's M&A for that matter, but actually also whether it's IT, it's R&D, or it is also within the operations side that we need to allocate capital to yield a good return. We are committed to deliver. We also believe that with our focus, we will be able to deliver. I'll also come back to that. But fundamentally, what are we changing? Here is a 4-year look back, you could say. GN has, for many years, been known to yield growth. Here, it's an organic growth of 4%. But what is also true, and you can see up here, is that the margins have not followed the same path. We ended 2023 on 10% in EBITDA margin.
This is not where we and I don't think either you think we should be in terms of our profitability. And that's, of course, also why we, in connection with the GN and also with the outlooks for this year, started the incline on changing the growth or continuing the growth, coming out of a 0% growth in 2023, if you have forgotten that, and the 10% into this year's targets where we do believe that the business will grow, 2%-8%. We will start the journey up from 10% into between 12% and 14%. And we will be committed to the free cash flow. And that's a sign that we will deliver. I'm sure you all read our first quarter results. All of them ticked the marks up here. In terms of organic revenue growth, we were 5%. On EBITDA margin, we were 12.5%.
We yielded a positive cash flow for the first time in many first quarters and have now generated more than DKK 1.7 billion over the last four quarters in free cash flow. So definitely starting on our commitment to deliver, which is now DKK 4.0 billion. Stefan spoke to it. We spoke to it also at the annual report and also when we launched the 1GN. We are firmly committed to the synergies in our company. We have stated that we have DKK 600 million that we will hunt for, of which the DKK 400 million will be nailed this year. I hope that at least with what we have seen in first quarter, DKK 90 million in the box, a good mix of gross profit, and actually the OpEx side already now benefiting us. I think Stefan came with an excellent example of where we are trying to harvest the scale.
It was in mechanical components where we definitely can see by consolidating into fewer, we increase the amount we buy with people, and we get better terms. So that's definitely on the right track. And also in operations up here, it is in the beginning of the year. And that's also why it's not in full scale yet because, of course, it takes time before all the contracts roll into the balance sheet and get, of course, into the P&L side. Organization, we had to trim the organization last year. We had to let go of 300 positions, 200 that we let go of, and 100 positions that we actually terminated internally. We are seeing the benefit already now in our P&L this year. So we consider that well on the way and in the box. Then we have efficiencies and processes.
We just had the question of what has been good and bad. Some of the things we are working with is, of course, the infrastructure in the company. Some of it will take time. We are all days actually looking for where we can see the scale of now being one company in the admin era. I am also leading that we have started up a shared service center in financials, in financials, basically, in Poland that gives us a little higher admin this year. But you will start to see the benefits once we come into the subsequent years. So there, we are on the start of it. Also here, we will do further on indirect procurement. That will also somewhat take a little longer time. But overall, we are definitely on the right track.
We have initiated the things we should do to deliver on the DKK 600 million. So what is it we are uniquely positioned to? I think the three divisional head, they clearly went through an endeavor to go on a top-line growth, stealing market shares, in many ways, structurally growing markets in all three areas. We have the margin expansion in front of us. We are committed, as you could see, to the margin expansion already in 2024. And we will for sure harvest the synergies that Stefan also spoke to going forward. We have a sharp focus on the margin, creating the possibility for a better operating cash flow. And then we are an asset-light business model. We don't have mega-large CapEx projects in front of us. We are quite nimble in that sense.
So that should also lead the way to a sustainable and an ability to deliver the company. But we need to balance margin and growth. And that's why we've spoken to that a number of times. So we need to get the margin home. The three divisions spoke to what value growth do they see in the markets? And what is it actually that supports our 5%-8% growth? I think in hearing here, Scott gave a very thorough run-through of the portfolio we have in the right place now, the partners we work with and collaborate with to generate our and create our share in the market, and then definitely also the innovation. We have been a leading innovator within the hearing industry. And this is definitely also what will make us steal share in the periods ahead of us. Will it be tough? Absolutely, yes.
Are there good suppliers or competitors out there? Absolutely, yes. We offer the challenge. I think 2023 already was a year where we started to demonstrate that. Quarter one was another good example of that where we were off to a good start in hearing. Coming enterprise, here, we have two elements that Calum spoke to. We have the core fundamental headset within the enterprise area where we believe we are uniquely positioned with our go-to-market models, with our high market shares of 50%. We're tapping into a potential in the front-line worker, although only early days. I think for the view of the room in the room here in Ballerup today, you've seen the video. We believe that that will grow 10%-12%. We are of the belief that the offering we have will be able to steal more than that in the value journey going forward.
Then we have gaming and consumer. I think it was amazing to again hear Ehtisham's passion about what we are doing in that area. And essentially, we have good products. We also have a long tradition, history in there. And actually, you could say that we up here say that it's customer-centric innovation. I will almost say it's gamer-centric innovation that he was the spokesperson of. It is deeply rooted in the way we operate and SteelSeries within the gaming industry. That's the way, and that's our claim to fame. And we stay really ahead of that game in there. We also acknowledge that when it comes to the true wireless and the consumer, that we are onto something with the products. We have trimmed the portfolio. We've increased the prices. But it's also about scale.
In both areas here, we need to pay attention to go on the margin journey also. We will need assistance from operations in the gross profit area in this field. We also need scale. We are, of course, really using our time to figure out how we can nail that in the future. Margin-wise, this is, of course, we are reporting out on the divisional margins. Of course, the longevity of the history here is, of course, back to 2022 as we've published these numbers. But just also to put sometimes the three divisions in context, we have 40% in hearing. We have 40% in enterprise. We have 20% in gaming consumer. So for 80% of our business, we yield what we believe is a quite justified margin. And it's in areas where we have a strong position. We are innovating where we should.
We are delivering what we can to the customers. They appreciate our products. We are of the opinion that 2024 will be a big step in the right direction when it comes to the margin game. Again, quarter one was a testimony to that. All our areas actually did improve their profitability during quarter one. All of them also lifted their gross profits in quarter one. We are of the belief that hearing, a little bit depending on where the end this year will go and have a further possibility to improve their divisional margin in the period 2025 to 2028. We believe that enterprise will stay focused on the market shares. We'll stay focused on tapping into the growth potential in video. That's why we believe that one there from a divisional profit margin is more on a flat line.
In gaming and consumer, as you probably heard both Peter, Ehtisham, and now me say, this is not only a 1-year game to improve the margin there. It's a journey. But we are, of course, determined to land that journey also towards 2025 to 2028. And that's why that has a positive EBITDA. We will have upsides that can drive this. It's innovation. It's our positioning. It's our go-to-market. It's our legacy in SteelSeries. And we will also, on some of them, have tail or headwinds, you could say, on average selling prices. We will also have macro uncertainty. And we are not trying to run away from that. It still is in our business model. But I think we are better positioned than we've been in the past to also tackle that. And here, also, Stefan answered that in our agility in our operations going forward.
Then functions of scale. We have now the R&D in one bucket under Christoph's leadership. We are now in this year up here 7% when we came out of 2023. We do anticipate that it will go up a little bit. And then that's, of course, part of it is in all fairness. We are now grouping also the people together. And then once it's up, we do believe that we will be able to yield the innovation needed with this value. And that's actually also what Christoph committed to. We do believe that we will be more effective in R&D. But we don't expect that we will necessarily spend less in a percentage of revenue. We'll just yield more output. And then when it comes to the G&A, probably I'm not too fond of 9% up there, to be very honest. And that we, of course, need to change.
We'll see the first step this year where we'll see a better balance between admin and the IT. So here in G&A, we put the IT down in G&A. Again, looking across other companies, it might be different. We believe that we're probably adequately put IT-wise 3%-4%. And that will be enough to fuel the journey that we are on on the ERP roadmaps and the modernization that Ann has ongoing. And then when it comes to G&A, we do believe already this year it will come down. And it will come further down as we tap into the synergies in the way we work and the way we are structured. When you restructure a company like ours, it's down to the legal structures actually need to be changed. Takes time. It's also down to the shared service center we've put out in Poland, etc.
So there are a lot of things why this is possible to bring the admin down and be more effective and also tap into the potentials that Anne spoke to when it comes to AI. We are committed to deliver that and improve that going forward. Then here, you could say, totaling it up to the bridge here, it is right that we have committed to take a good, fair jump of it here in 2024. There was also a need to do that. Part of that need has been the commitment to the synergies. Part of that has been the focus in each of the divisions to deliver on this profit journey. Part of it has been, again, the relentless focus from operations. We do believe that the divisions will contribute to the further improvement of our margin.
It will be a mix between further gross profit improvements and actually being more scalable within the sales and marketing that counts up there. When it comes to the R&D and G&A, we will be sort of on par, probably, with the R&D. And we will be able to harvest when it comes to the G&A. Albeit , we'll probably use a little more on IT but harvest a little more in the admin area. And then, of course, this has been a slide I showed a couple of times since I started in G&A, the capital plan that was launched back in May. It's been critical for us that we have followed that path, that we have landed a good capital plan, and that we have delivered on it. We have raised the equity.
We have a good debt structure in place, giving visibility all the way out to quarter three of 2026. We've made disposals of $1 billion out of the $1-$2 billion. And we've also said that we are fortunate enough that we don't have to, are not forced to, yield the next $1 billion. But rest assured that we always look at the businesses. And if we are not the right owners, we'll try to figure out who would be. And then we will dispose. So that's the commitment up there. And then, essentially, the operating cash flow, without that, we will not be able to deliver to where we need to. And I think here, the last couple of quarters has been a testimony to that. And we are of the firm opinion that that is what we will be laser-focused on still.
The cash flow, of course, is also about the working capital. So it's not only enough to generate the margins. It's also about the working capital. And we did improve that relative to the top line during 2023. We are at a level now where we believe it is justified. There are more areas where we can still improve, but probably not to the same extent or speed as we did during 2023. But it's important that while we grow, that we stay and keep this in balance, basically, as we grow. And that's what we are focused on going forward. Will we then be able to sort of generate the cash or put the cash to the bottom line and basically then repay the debt? We believe that we are an asset-light business model.
We also believe that we will be able to have a cash conversion before interests around 50%-70%. So the interest, we believe, will be here in the earlier years. We will take us a little south of that. But fundamentally, long term, we will be a cash generator that will be able to deliver the company at a good pace. We see this delever age. We see that in phases, basically. And that's not so that is not dramatic in many ways. I think many companies would have the same view on it. But for us, we are in this phase one right now that covers number one and number two. We are in a good state as a company. We have good markets. We know what to do.
We need to continue also to accept that some of the cash and CapEx needs to go to ERP improvements, to R&D, to operations, to yield the results and the margin improvements that we promise you. But we also believe that whatever is left then probably needs to go towards the repayment of debt in the first place, at least, to deliver. Occasionally, in this period, and that's number the phase two, there might be this synergetic M&A that can either de-risk us or bring a little scale in smaller areas. And of course, once that happens, we'll update you. But again, number one and number two remains our key priorities as we speak. Once we get to the famous 2.0, then we will, of course, revisit what's our capital deployment. And of course, here, we will again take a sharp look at whether it's dividends or it's share buybacks.
That will come at that point in time. But it's important to understand that when we say 2.x in the targets by 2028, we will focus on getting it down as I mean quickly as we can. But it's more long-term aspiration for you so you know where we are steering towards the 2.0x. And that brings me to this one. And that was more or less one of the opening slides from Peter. Fundamentally, we are a growth company and have set out targets now with 5%-8% organic growth. We will yield an EBITDA of 16%-17%, up from 10% in 2023. Again, believing 12%-14% in 2024. And then we will, longer term, here, always have a target of 2.0. But rest assured, with the margins, with the net working capital, with our cash conversion, we will deliver as soon as we can.
So essentially, now having been a full day and, of course, the energy hopefully is still in the room, what is actually then the investment case? The three division leads, they brought you attractive markets, Tech and MedTech, essentially. We believe that the positions we have, we are there are high entry barriers. Some are of nature within the hearing. Some is more probably G&A linked when it comes to enterprise. And within SteelSeries, it's definitely also down to the legacy and something we have built. And that is quite difficult to steal in the short term. We have a deep expertise, in the way we have, combined hardware and software. I think, Christoph spoke to that quite clearly. And we have fundamentally heard from all three divisions that customer-centric innovation remains a key to us.
I think, in all fairness, we have a good portfolio of products out there demonstrating that we do deliver innovation to the markets. And they are definitely driven out of customer needs. Everyone in the division talked about our ability to work with partners, whether it was the divisions, whether it was R&D, or whether it was operations. We have a scale where we are interesting to speak to. So we are not only sort of having to pull in partners. No, they also come to us. They want to work with us because we matter. We're big. We have an agile operations. We haven't always had that. But I think Stefan and team have definitely done a lot. We've learned a lot from COVID also, in all fairness, of how to operate this. And what is true, at least, is we have scale.
And now we deploy scale across our divisions. You can see the benefit of that in the results, in our commitment to the synergies. We are also, albeit, we haven't talked so much about it today, but very committed to sustainability. We will, on Scope 1 and reduce it by 80% by 2030, Scope 3 by 25% by 2030, and we'll go net zero by 2050. Hopefully, some of you out here took the opportunity to meet our head of sustainability and also learned a little bit about what we are doing in, yeah, reuse and also use of, reuse of materials and packaging, etc. So it's not only the CO2 that matters for us, for sure, globally. If all of the above are right and you buy into that we are an asset-light business model, we will focus on driving gross margin.
Through that, we will gain the cash. We will be able to deliver and hopefully return value to you, being our shareholders. So that is, in our mind, the investment case. With that, I would like to invite Peter Karlströmer back on stage with me for the final Q&A. Thank you.
I think Martin was first.
We can sit down again. Actually not, but thanks anyway.
Just Søren on the facing or the margin of 16%-17% by 2028. Coming from 2024, should we see it being back and loaded? Are there any reason to believe that in the beginning of the period we should see higher investments in the, in the video business, for example, which means that we see a margin short-term trade, sideways?
And then the second question, being on the enterprise side, you know, I would have actually thought that there would be a little bit more scale in the enterprise side. But can you share some details on what growth rates on the top line is? Will there start to be scale in the business?
Yeah, I think Peter will take number two, and I'll take number one here. Essentially, the way we look at the model right now and the way we look at the composition of the three divisions, the commitment to the synergies, and how it pans out over the years to come, we believe that it's an even distributed journey towards the 16%-17%. So there will be sometimes a little up in one division, a little down in one division, but that's the way we portray it.
So in our mind, no, it is not back-loaded. It is fairly well distributed as we go along with the years.
Speaking about enterprise, Calum went through earlier today how we think about growth. I mean, we feel good about the headsets, but probably a little bit less growth, more growth in video, as well as the frontline workers. I think we have a fairly good operating leverage in this business. But also, as we are building businesses, there is some kind of cost associated with that, of course, even if there are good synergies. And we also believe that the margins we have, and Søren, yes, went through them, are fundamentally healthy margins. So for us, it's a lot about finding the right trade-off between growth and margin. And as we're planning forward, we have put forward what we think is a good base case here.
As we said several times, we will be treating all investments with a lot of care to make sure we're doing good things. But we believe this is a healthy level to drive growth and innovation also beyond the headset categories.
Just pass it on to Niels, just sitting next by. Huh, we can just.
Thank you. So within each of your three divisions, you would have loss-making subsidiaries. I believe that if you add together the online hearing business in the U.S., the military headset business in enterprise, and the consumer business in the gaming and consumer division, those three businesses would represent approximately 15% or so of your group sales. So to what extent would a turnaround of those loss-making businesses be a requirement for you to reach your margin targets in 2028? Do you need to break even in those loss-making businesses to reach your margins?
I think first and foremost, at least the three divisions you group together, I don't see them as 15%, but let that rest for just one second. So I think but anyway, the question is, of course, fair. We are committed in all business lines, basically, to make them profitable, to the level where they are competitive in the fields they operate. That's for sure. And that's also why we've been committed.
Jabra Enhance , basically to say this is an area of interest for us, as Scott spoke to it. It's a market that probably, if anything else, it's enlarging the market. We believe that we had a good approach to the virtual route within that market. It costs money to, of course, make a good stab at that market. We have known that. We have also seen that the cost of acquisition, the customer acquisition costs, have actually come down. We also believe that we're still targeting that we break even 2025 and 2026. But you probably also listened to me that break even is probably not enough, right? Because then we are not at the profitable level where the rest of the hearing is. We need to consistently believe that that journey is there. So far, they are on track to deliver that.
That's why we are staying committed to that as an example of the three. But Peter, maybe you have one.
No, I said it already in the opening today also, that there are areas where we have a lot of focus, where we know that we need to make quite a big step over the coming years to be where we like to be, to feel satisfied. I mentioned OTC. I mentioned video and consumer. You're adding here FalCom, which I think is fair. It's a similar nature, a bit smaller though. Each and one of them, we are making good progress. We have good plans in place. And as long as we're tracking those, we feel confident that it will create good shareholder value. If we for some reason would believe that this is not working out, I mean, we are ready to use our full toolbox. But that's not where we are today. But we're very committed to make sure that these businesses perform.
Great. Thank you. And you're right. They represent 9% of your sales, the businesses that I mentioned. But does it mean that your patience with these businesses runs until the end of, say, 2025? And if you don't reach break even at that time, then they are for sale?
We have not set a timeline. But I think I don't want to say a specific date. But in the next couple of years is probably how to think about it.
Great. Thank you.
You can pass it on to David.
Hi, David here from J.P. Morgan. Just on your capital allocation, just thinking about your potential for disposals, just wondering if you could put a percentage on the likelihood we'll see some disposals this year. Following on from that, that would take your leverage down, obviously, quite nicely. Towards your next target in terms of M&A, of the three businesses you have, which do you think would most benefit from M&A? Is that a kind of scale target, or is it a technology target that you'd be looking at?
I'm happy. As you noted, we have not talked about M&A today for a good reason. I think it's back to Søren's overview. We are very much focused now on what Søren called priority one and two, to deliver the company. I think that when we look on the different markets, it's slightly different in nature. Hearing, I think it's a fairly well-defined market in terms of what the players are. It's very important for us to gain further market share, as Scott laid out here earlier today. We don't think large-scale M&A also are the main lever for us to do that. I think Scott presented more like a well-funded organic plan. Enterprise, if we would do M&A there, it would be if we like to augment growth opportunities, video frontline work, if possible, over time, other things. That could possibly make sense over time.
Then gaming is a bit different. It's a fairly fragmented market, where there are also a lot of adjacencies to where SteelSeries is. Ehtisham talked about the gaming rig. If we would do something there, we'd probably be smaller companies and to essentially plug them into the SteelSeries way of working. But we're happy to come back and update you more on this. But we do not have any imminent plans of an M&A at this point in time.
Thanks.
Christian?
Yeah.
Thank you. A couple of questions from me as well. First, when you run a transformation process like the one that you've now been doing for the past couple of quarters, you often uncover new opportunities. Obviously, you're not communicating anything, I would say, quantitatively on this today. But I'd like to hear how you're working with that, whether this is basically a fixed project it's running to its end, or whether there is sort of embedded some kind of follow-up where you might do a second round of projects. That's the first question. The second question is, when we look at the divisional profit margins and this might be putting you a bit on the spot, but I'd like to hear your perspective anyhow how are you thinking about the return on invested capital across the three different businesses?
Because if we leave aside goodwill, I'm assuming there's quite a big difference between what kind of margin levels that are required between the three to reach a similar kind of return on invested capital.
Yeah. I think basically the return on invested capital, Peter, on some of your reflections, maybe on that. And then the first one, it was a multifaceted question to some extent. The first one, there was a synergies. Yeah, yeah, fair enough. Evidently, when you do this, you always unfold new yeah, you learn more as you move ahead. I think we have built this program to basically ensure that this will also be more a way of working. Because when we, in our mind, set out a synergy in operations, mainly centered around the DKK 200 million, rest assured that this is not the first time Stefan is, of course, working to optimize the gross margin. So, of course, it will be an embedded way of doing it. But it needs also to you need to put some power to it to get it going.
I think they've done a fantastic job in operations delivering that. And there we will be more and more wise. We'll consolidate more and more. And eventually, of course, there could come more out. But I think, in all fairness, first things first. And that's where we are committing. When it comes to the organization, I think we have taken what we believe is right. There it's more about that if we find more, it'll probably be more leading to reinvesting it into the business than necessarily upfront harvesting it. And when it comes to the sort of the operating improvement areas, I'm sure we'll learn of that. Now, we set out the DKK 200 million on that. That's also the one that is mostly centered around 2025, 2026. And I'm sure that's probably where we will learn more as we move ahead.
No, this is not the final way of looking into synergies. I think we also, as a company, need to embrace this as a way of working more than treat it as a project.
And back to the investments, I mean, I highlighted that also in the opening. It is very important for us. And generally, the ambition is, of course, to bring up the return for the group as a whole. And to do that well, we need to make sure we put capital to work with good returns. And we have, of course, a yearly process for that. It goes hand in hand with a budgeting process where we're looking into investments. And a lot of that is in the R&D. Already today, I think we can share that there is an absolute majority of the R&D spend we have going into hearing and enterprise where we have healthy margins. SteelSeries, we didn't talk about that part of the business so much today.
But I think it's a very efficient R&D model we have there, not at all consuming the same level of capital. So I actually think that the fundamentals of the business is supporting a healthy return on investment capital as we move forward. But this is something we pay a lot of attention to also, project by project. Then, of course, there are other investments also, like IT, where we've been going through an investment phase. I think we're probably somewhere in the middle of that and have a bit more work to do to modernize the key systems, basically to make other areas work and bring benefits to the company, including operations, an example. And then the last one to highlight, I guess it's back to M&A also.
If we would do M&A, we would make sure we do that in a way that we have good line of sight to healthy value creation.
I think we have the last two questions. Ronnie, go first.
Excellent. Thank you so much. Two questions. One is actually on the topline guidance and the 5%-8% that you've expressed. Just curious how different this is from the guidance or how differently constructed it is from the guidance you've given in the past. I think the historical guidance assumption was always normal macro. I'm curious what you've allowed for in this 5%-8% range and how you're thinking about the risks, both to the downside and the upside. And then my second question, to push a little bit on David's point, but Søren, if I look at your pie chart on disposals, it's half completed. Where is the other half, and when do we get there? Thank you.
I'll be happy to answer one of the last questions. I think we've said when we put out the capital plan back then, we said that this was what we needed to have a plan for in the event that the rest would not come true. I think we now can look back at four quarters where we definitely are on the right track and delivering the operating cash flow as we would need. Then we also said back then that there were two areas that we needed to start frontload. We delivered on that. We then said that in the event that we are not the right owners, back to Peter's, we shouldn't own things that we cannot develop or yield enough returns on. We will still focus on that. I don't think that will go away.
It's essentially still for you to believe that we are focusing on that if we have assets that we cannot turn a value on, we will dispose. That's the way you should look at it. I've said it multiple quarters now. I think now there is even more reason to believe that we are in good control and that we scrutinize the assets over time. We don't want a fire sale. We want to sell the right things at the right price if we don't believe we are the right owners.
And then just talking about the top-line longer-term guidance here, I think we have planned with a macro, which is about the one we're living in today. I think that if there's some variance to that, I think the range will accommodate that well. If there are more significant variances to it, I think that would probably be a bigger discussion for many companies around the world. But then within that, I think what is a bit different that I think, in particular, Callum talked to, we're still living through some kind of period where we're trying to refine and rediscover the markets after the COVID era, basically. And that is creating different scenarios for market growth. And I think it is a lot market-related growth also in the top-line guidance creating the range.
I think in any scenario, we're confident in our ability to innovate and to drive market share improvements. That's certainly the ambition we have over this time horizon, to drive market share improvements in each of the divisions.
The very last question. Niels, did you still have a question? Sorry for putting you on the spot.
Thank you so much. A quick question for Søren. Excuse me for returning to one of my favorite subjects.
I'll give it.
That's about accounting principles, of course.
Yeah, here we go.
Referring to page 173, you state that you will see a little bit of headwind before 2028 for, I think you believe you say, a normalization or something like that of R&D and IT cost capitalizations. Can you be a little bit more specific? Historically, you have benefited by around two percentage points on your EBIT and margin from capitalizations. Where should we put this in the future?
I think what I've said and what I will say today as well is that the accounting rules, they stand. Basically, what we are putting these targets out against is the accounting rules and how we deploy them today within GN. That's still our fundamental belief. We also have the belief that the most important thing and the best thing we can do is to focus on the projects we do sit at sea, are challenged enough so that it really creates value for GN and that it's not overly costly to GN. Then the way we will then deploy it into the balance sheet and the P&L will be according to our guidelines. Then it will, yes, fluctuate a little bit depending on the portfolio within the IT projects and the R&D projects. That is the way you should think of it.
It will fluctuate. I will not give you a specific number on it. But I think you should still see it as we have the accounting principles. Rest assured that the products we start, they will be scrutinized to ensure that they yield the return we want to and are not overcosted. There are probably needed money to be spent in some of the areas that we do. Then we will capitalize what we have done historically or according to the same principles.
Great. Thank you.
I guess that was the last question. So I will hand over to Peter just to recap.
Okay. Thanks a lot for staying active. Thanks a lot for being with us today. And in particular, all those of you joining us online, I know that's in particular difficult to have almost like a full day online. We truly appreciate you coming here as analysts, showing interest in our company, and really trying to understand us, to giving good advice to your clients, and as investors, of course, to support our business. We hope today that you have digested both the targets we have put out there but also got a little bit of a better understanding how we're thinking about delivering on these targets. And let me just say, as a leadership team, and I hope that's a feeling you take with you also as you're leaving here later today or tonight, we are very committed to deliver on this.
We are also very committed to seize opportunities in the markets. We have put out some ranges also to guide today. What you should know is that we are ambitious in terms of both hitting the targets. In some opportunities, hit higher ranges of the targets. In more difficult, the lower ranges of the target. But rest assured, we will work very hard to make sure we drive success in the company. We think we have come a long way already in a relatively short time here in the last year or so. But now it's all about looking into the future and really go from some level of stability we created to now also create greatness. So thanks a lot for joining us on our journey. And thanks a lot for your support. And great to see so many of you with us here today.
Thanks a lot.
And Rune, it's probably better you take the practicalities as master of the ceremony. I know we have a tour and a dinner for those that are interested. So perhaps you can share some details.
Yes. We promised you this sneak peek to our R&D facilities. So for those of you that are interested, just follow me. There will be some wine sitting outside as well. So you are happy to just stay around for a few minutes, half an hour still. For those of you signed up for dinner, there will be a bus leaving at the premises at 8:30 P.M. And that's probably the final practical remarks I have.
Not 8:30.
18:30.
6:30.
6:30 P.M. or 6:30 A.M.
And I trusted you, Rune.
Yeah. Don't do that. Thank you, guys.
Thank you so much.