Earnings call transcript: GN Store Nord Q3 2025 sees stable growth

GN Store Nord reported its financial results for the third quarter of 2025, highlighting a 1% organic revenue growth and an EBITDA margin of 11%. The company’s stock rose by 1.3% following the announcement, reflecting investor confidence in its strategic initiatives despite challenging market conditions. The earnings call reconfirmed the full-year guidance, projecting organic revenue growth between -2% and +2%.

Key Takeaways

• GN Store Nord achieved 1% organic revenue growth in Q3 2025.
• The company’s EBITDA margin stood at 11%.
• Full-year guidance was reconfirmed, with expectations of organic revenue growth between -2% and +2%.
• The stock price increased by 1.3% following the earnings announcement.
• New product launches in the hearing and gaming segments contributed to growth.

Company Performance

GN Store Nord demonstrated resilience in the face of macroeconomic uncertainties, achieving a modest 1% organic revenue growth in Q3 2025. The company capitalized on its strong market presence in the hearing segment, which saw a 7% organic growth driven by the launch of the Vivia hearing aid. The enterprise market, however, faced challenges due to broader economic conditions.

Financial Highlights

• Revenue: Not specified, but organic growth of 1% noted.
• Earnings per share: Not specified.
• EBITDA margin: 11%
• Gross margin: 54.4%
• Cash flow: 410 million Danish kroner
• Net interest-bearing debt: 9.4 billion Danish kroner (leverage 4.0x)

Outlook & Guidance

GN Store Nord reconfirmed its full-year guidance, expecting organic revenue growth between -2% and +2%. The company plans to launch a new hearing aid in 2025 and is focusing on margin restoration in its gaming division. The enterprise market is anticipated to recover gradually, and significant orders have been secured for the Falcon telecom business in Q4.

Executive Commentary

Peter Karlströmer, Group CEO, stated, "We delivered a solid quarter with 1% organic revenue growth," emphasizing the company’s ability to navigate challenging markets. Søren Jelert, Group CFO, added, "We are reconfirming our guidance for the year," signaling confidence in the company’s strategic direction.

Risks and Challenges

• Supply Chain Issues: Continued diversification efforts are crucial to mitigate potential disruptions.
• Market Uncertainty: The enterprise market remains challenged by macroeconomic factors.
• Tariff Impacts: Pricing actions are in place to counteract tariff-related pressures.
• Consumer Sentiment: Weak consumer sentiment has impacted the gaming market.
• Debt Levels: High leverage at 4.0x requires careful financial management.

Q&A

During the earnings call, analysts inquired about the company’s strategies to mitigate tariff impacts and the dynamics of inventory reduction. There was also discussion on the replacement cycles and developments in the OTC hearing aid market, providing insights into GN Store Nord’s operational strategies and market positioning.

Full transcript - GN Store Nord (GN) Q3 2025:

Rune Sandager, Head of Investor Relations, GN: Hello everyone, and welcome to GN’s conference call in relation to a Q3 report announced this morning. Participating in today’s call is Group CEO Peter Karlströmer, Group CFO Søren Jelert, and myself, Rune Sandager, Head of Investor Relations. The presentation is expected to last about 20 minutes, after which we’ll turn to the Q&A session. The presentation is already uploaded on gn.com. With that, I’m happy to hand over to Peter for some opening remarks.

Peter Karlströmer, Group CEO, GN: Thank you, Rune, and thanks to all of you for joining us today. Let me start with the group highlights on slide four. In Q3, we delivered a solid quarter with 1% organic revenue growth driven by market share gains and strong performance across our divisions. Our execution led to a healthy margin and cash flow development, allowing us to reconfirm our guidance for the year. In hearing, the rollout of recent Vivia is continuing and progressing very well. Vivia’s strong differentiation and our solid commercial execution led to broad-based market share gains and 7% organic growth. Overall, we are very pleased with the positive feedback received in our two recent launches of Vivia and Enzo, and we are confident that they will successfully support our future growth ambitions.

In enterprise, Q3 marked the fourth consecutive quarter of positive seller growth across North America and APAC, driven by market-leading innovation and strong channel execution. In Europe, we are successfully defending our market-leading position, while our top line is impacted by the ongoing market uncertainty. In total, enterprise organic revenue growth in the quarter was negative 4%, while the seller growth was somewhat stronger. We deliver healthy gross margins despite headwinds from the current tariff environment, thanks to successful supply chain and pricing action we are taking. In the quarter, we also announced a partnership with Hadley concerning large meeting room experiences and introduced a range of new products in Falcon. In gaming, we continue to gain market share and deliver 3% organic growth in the gaming equipment market, challenged by tariffs and lower consumer sentiment.

In the quarter, we executed well on our tariff mitigation plan, further diversifying our manufacturing footprint and rolling out price increases to limit the net impact from tariffs. We are also excited and proud to have launched Arctis Nova Elite, the world’s first premium wireless gaming headset with a high-resolution sound. In summary, we are pleased with our execution and results in a relatively challenging market environment and are ready to benefit from markets as they grow stronger. With that, I’m happy to hand over to Søren for group numbers in the quarter.

Rune Sandager, Head of Investor Relations, GN: Thank you, Peter. As Peter mentioned, our third quarter was a solid quarter and an important step towards our strategic ambitions. In summary, our group organic revenue growth ended at 1%, excluding the wind-down driven by a continued strong performance in hearing with a 7% growth, offset by a negative 4%. Growth in enterprise due to the global market uncertainty in EMEA. Gaming continued to perform well in a challenged market, achieving a 3% organic growth and taking share. Reflecting the development in the revenue, the EBITDA margin came in at 11%, mainly due to negative operating leverage. Our cash flow was solid in the quarter, coming in at 410 million Danish kroner, excluding M&A, reflecting our earnings profile as well as a positive impact from working capital. Now, let’s move to the financial details on slide six.

Despite direct impact from tariffs in two out of three divisions, our gross margin remained strong at 54.4%, being only 0.4 percentage points below last year. As mentioned by Peter, this can be attributed to our effective price mitigating initiatives, strong pricing discipline, positive business mix, and group-wide synergies. Reported EBITDA margin ended at 11%, which was 2 percentage points below last year, reflecting the development in the revenue as well as provision release in gaming in Q3 of last year. Moving to the cash flow, our strong earnings profile combined with our favorable development in our working capital resulted in a positive cash flow of 410 million in the quarter. Driven by the solid cash flow, our net bearing interest debt decreased to 9.4 billion Danish kroner, which equals a leverage of 4.0x.

As we communicated already as part of Q2, we have now formally signed our new loan facilities, which means that we have extended our debt maturities while at the same time negotiated lower interest rates, which should start to kick in from Q4. With that, I’ll hand you back the word to Peter for some financial highlights on hearing.

Peter Karlströmer, Group CEO, GN: Thank you, Søren. Let me start with our hearing division. In Q3, our strong momentum of a recent Vivia continued to drive growth through broad-based market share gains. As a result, we grew organically by 7% in the quarter, which was on top of a high comparison base of 10% in Q3 last year. Our gross margin came in somewhat lower than last year, primarily reflecting negative country and business mix, as well as our disposal of Danske Høre Center. Sales and marketing costs decreased by 6% compared to last year, driven by prudent cost management, while we continued to invest in key initiatives supporting the strong momentum of Vivia. Due to the gross margin development offset by positive operating leverage, our divisional profit margin ended at 34.2%, which is similar to Q3 of last year. Let’s move to the next slide for some more details on the geographical performance.

As mentioned, recent Vivia was a primary driver of our ability to gain market share across markets again in the quarter. In North America, we delivered solid organic growth in the independent segment and VA, thanks to the strong reception of recent Vivia. We experienced some challenges, though, with Jabra Enhance that is negatively affected by the low consumer sentiment. We also had a headwind at the major US retailer due to changes in the competitive environment. In summary, our organic revenue growth was flat in North America in the quarter. In Europe, we continued to take shares in key countries like Germany, France, and the UK that led to very strong double-digit growth in Europe. In the rest of the world, strong momentum in ANZ and our distributor channel led to strong organic revenue growth for the region as a whole.

Overall, we are pleased with the hearing performance in the quarter and continue to make progress towards another strong year. With this, let’s move to the enterprise division. In enterprise, the positive seller trend in North America and APAC continued in Q3, while EMEA remained challenged by the uncertain macro environment. In addition, we continued to experience inventory reductions in North America. In total, the enterprise organic revenue growth was negative 4% in the quarter. In Q3, the impact from Falcon was limited, but we are happy to share that Falcon has signed significant orders we plan to deliver in Q4. The enterprise gross margin remained strong and increased by 0.6 percentage points compared to last year, despite challenged market and US tariffs. Overall, the actions we have taken in our supply chain and with pricing work well and as intended.

Sales and distribution costs decreased slightly in the quarter, reflecting good cost control, but also targeted market investments in preparation for the important Q4. In total, the divisional profit margin ended at 34% for the quarter. Let’s go to the next slide. It is encouraging that we now have experienced positive seller growth for four consecutive quarters across North America and APAC. This has been driven by strong commercial execution and our market-leading product portfolio. Whereas the selling and sellout was fairly balanced in APAC, we did experience quite the difference between selling and sellout in North America due to continued channel inventory reductions. In Europe, both selling and sellout continued to be challenged due to the weak macro environment and uncertainty of the trade environment, making several companies hold back investments.

However, we do observe some improving trends in key markets like Germany and the UK, while we also see that the political instability in France has made this market turn down. While there are some opposing forces at play, we believe the market continues a gradual recovery and return to growth. With the current dynamics and with the revenue contribution from Falcon, our base case assessment is that the total enterprise business will continue to improve its growth pattern into the fourth quarter. Let’s move to the next slide. We continue to believe in the long-term attractiveness of the enterprise market, driven by hybrid work and the ongoing upgrade of collaboration tools to create a seamless and high-quality experience allowing hundreds of millions of people to communicate in a natural, undisrupted, and clear way.

In this light, we are very excited about our coming headset platform launch, which has been in development for several years. We intend to significantly improve the headset experience for our millions of daily users across multiple dimensions. We aspire to take the appreciated Jabra experience to new levels in terms of performance, looks, and comfort. The early customer feedback and the end day is very positive. We will launch a complete range of new headsets over the next 12 to 18 months. The first two products will be available to selected customers during Q4, and the general availability will be at the beginning of next year. We will share more details on these upcoming products and launch. When we come closer to the launch event. And with that, let’s turn to the next slide for some comments on gaming.

In Q3, the gaming market continued to be challenged by the tariff environment and weak consumer sentiments. Despite these challenges, SteelSeries delivered an organic growth of 3% thanks to continued appreciation of its product and good execution. With a successful wind-down of our Elite and Torque product lines, overall revenue growth for the division was negative 16%. Our gross margin ended at 31% in the quarter. We had a negative effect of tariffs, partly offset by pricing increases. Q3 last year, we had a provision release that impacted our numbers by around 6 percentage points. If you exclude this, the gross margin was essentially flat in the quarter. Sales and distribution costs decreased 33% in the quarter, driven by the structure savings from the wind-down and the general and prudent cost management and our group-wide cost program.

All in all, the division profit came out at 9%, excluding the consumer wind-down, reflecting the gross margin development, but partly offset by positive operating leverage. Let’s go to the next slide. In September, SteelSeries reinforced its position as an innovation leader with the launch of Arctis Nova Elite, the world’s first high-resolution wireless gaming headset, delivering stellar sound that many testers describe as an audiophile gaming experience. The headset is by far SteelSeries’ most advanced headset to date, offering a wide range of new features, including OmniPlay for improved connectivity across platforms, AI noise reduction, and improved integration with the SteelSeries app for real-time audio control. As evidenced by the highlights to the right, feedback has so far been exceptionally positive, which is great to see. I think these reviews certainly speak for themselves.

And with that, I would like to hand it back to Søren for some comments on our guidance.

Rune Sandager, Head of Investor Relations, GN: Thank you, Peter. We are today reconfirming our guidance for the year, so we’ll keep this short. We continue to expect an organic revenue growth, excluding the wind-down effect between minus 2% and plus 2% for 25. In addition, we are reconfirming our EBITDA margin guidance of 11% to 13%, as well as our cash flow, excluding M&A, of around 800 million DKK. With the execution we’ve seen in the first nine months of the year, we continue to believe that the midpoint of the guidance being the most realistic scenario. That concludes our update on the business, and I’m happy to hand you back to Rune. And with that, I’d like to hand over to the operator for the Q&A. Please limit your questions to two at a time, please.

Conference Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press Star and then One on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star and then Two. First question we have is from Angela Bozynovic of BNPP. Please go ahead.

Hi, good morning, and thank you for taking my questions. I’ll have one on hearing and one on enterprise. First in hearing, you delivered another quarter of very strong growth despite the market weakness. Can you talk about your market share in the quarter, and especially with US independence and any other regions that you would want to highlight? And specifically, could you comment on the share in Costco, and how do you think about its channel going into year-end, and how did hearing perform, excluding. Costco? And finally, on enterprise. Can you maybe break down performance by region the same way you did for US, sorry, for EMEA? And specifically, what are you seeing there? It’s been four quarters of positive sellout in other regions, but EMEA is still lagging. Do you expect this to change in Q4? And what are you seeing on the ground in the region?

Thank you so much.

Peter Karlströmer, Group CEO, GN: Thanks a lot for your question. Let me take them in the order you asked them here. So if we take first hearing and the market shares. We did well. As I mentioned in the opening here, and the US independence. Don’t like to comment on exact market share numbers and so, but this was certainly a growth contributor for us. If we look on. Other markets and so, we had a very good. European performance, and we saw some outperformance in Germany, France, and the UK. And there we also, I think it’s fair to assume we in a healthy way gained market shares. So these were really the larger key markets supporting there. And then if we look more.

On the APAC market, I would say several markets did well, but in particular ANZ, and then we have a lot of distributor-led markets there, a bit smaller markets, but this channel and our execution there. Generated very healthy growth. So those are probably the highlights I’m able to share. You did ask about Costco. I think the situation is, of course, similar as we talked about before. We are doing very well in our relationship with Costco. Feel that the partnership is in a good level. But of course, them taking the decision to go from three to four manufacturing partners. It’s certainly having a bit of a headwind on our business. We estimate that headwind to be around 2 percentage percent of growth for our hearing division, just to help you to understand the magnitude there. Then if I move to enterprise. Performance.

Per region, I mean, the way we see it first is that the sellout growth in the US and APAC continue now is four quarters. We see that that’s very positive. I think it essentially means that these two regions have turned into growth. And our business there is also performing well in terms of market share levels. If we look on APAC a bit more in detail, I think what we are doing in particular well has actually been in India recently, our own business, but I would say generally the APAC business have developed in a healthy way. And then in Europe, it’s been difficult here in Europe because some markets actually have started to turn more constructive, and some markets have almost been a little bit of a setback. The positive development in the last quarter has been Germany performing a bit better.

We were quite worried about Germany in the beginning of the year. I think that certainly has improved quite a lot. And that’s very important because it’s, of course, a large market, and we also have very healthy market shares there. The market that’s turned a bit opposite, as I mentioned, is France, where probably related to the overall uncertainty around the political environment has made this market turn a bit more to the negative side. So all in all, I do still think if you add this up together, we do see a gradual improvement of the markets. And we do believe that will continue into Q4. I cannot guide more on Q4 than what’s implicit in what Søren said, but when we look into next year, it’s certainly our ambition to be able to drive growth in our enterprise division.

Conference Operator: The next question we have is from Carsten Lundborg Madsen of Danske Bank. Please go ahead.

Analyst: Thank you very much for taking my question here. First, a question to Søren on your free cash flow. So year to date, we had 368 million Danish. Despite generating 410 million this quarter. So a very solid quarter, of course, but also. With a relatively high impact from the release of working capital. So into Q4, could you provide a little bit of building blocks whether you can one more time release working capital, or whether it’s simply just the margins coming up in that quarter that should support the. Last 400 million in free cash flow we need in order to get to goal. And then to Peter, I guess, in terms of Jabra Enhance.com, now I’m getting looking at a quarter where it seems like Jabra Enhance doesn’t really matter a lot. So what’s the patience with this?

And/or could you, are there any other options you could exploit in order to get some growth or some value contribution out of Jabra Enhance.com?

Søren Jelert, Group CFO, GN: Hi Carsten, thank you for the questions. I think on the cash flow, you are absolutely correct in catching it up, so to speak, year to date. And I think in many ways, this is the profile. We have also seen and expected NTN. Normally, we have the second half of the year as the positive cash contributor for us. And actually, with now for this quarter in isolation, quarter three of 410 million DKK, of course, that was important, and it was nice to see that it was also driven by working capital improvements. Coming into the fourth quarter, it is also a fact that we have a higher earnings quarter. We have also a higher top line, but also a higher earnings profile. And that’s normally also what supports our. Endeavor to deliver the free cash flow of 800 million for the full year.

So in many ways, I think what we have now laid out increases the likelihood of the 800 million, and is by no means different in nature of periodization compared to historic numbers.

Peter Karlströmer, Group CEO, GN: And if I comment on Jabra Enhance, just taking a step back to. Build on what we said before, we’ve always seen this as a long-term business build. And for. Many, many quarters, we consistently executed towards a break-even late this year, early next year. I think we just need to recognize this has been actually a difficult year for Jabra Enhance, where the business, instead of growing, has been having a decline. And it was a decline here in the quarter also. And we recognize that this is, of course, both a headwind for the growth, but as well as for the profitability. So. To your question, we are certainly working on all levers here. We do like to see the businesses to perform stronger. We’re taking a lot of initiatives to do that.

What is driving the softness is likely more the macro environment and the weak consumer sentiment, but we’re certainly taking all initiatives to return it back to growth. I think we have indicated in the past also that. This is a business we could see ourselves passing on to another owner over time. But we do like to do that, of course, at the right point in time when we think we can do this to a fair value. But we’re essentially assessing all alternatives here to both improve the business and make sure we, from a value creation point of view, are making the right decisions.

Conference Operator: The next question we have is from Veronica Dubojova of Citi. Please go ahead.

Good morning. Thank you for taking my questions. I will keep it to two, please. My first one is just on hearing and how you’re thinking about the competitive environment and the sustainability of your growth rate as we kind of move into next year, if you can sort of maybe talk about the pulls and pushes that you see there. Obviously, Vivia has been a tremendous success, but we do start to annualize that out early in 2026. So if you can maybe talk through some of the opportunities that you see above and beyond that. And then my second question is on enterprise. And thank you for all the color. I guess, Peter, do you think fourth quarter is when the sell-in and the sell-out in North America can start to converge, or is there much more inventory left in the channel if we can talk to that?

Thanks.

Peter Karlströmer, Group CEO, GN: Thanks, Veronica. And thanks for the positives on Vivia. And we are, of course, very proud of Vivia and the underlying capabilities here. We do think it’s a very complete hearing aid, performing very well in the market. And as we can see in the quarter, there’s certainly still a lot of positive momentum around Vivia. And we do believe that will continue for several more quarters. We are already now, of course, working on the next launch after Vivia. We will make a launch also next year. We have not communicated the exact timing of that. And then, of course, as we always try to do, have an incremental innovation along the way. So. I do believe we should be able to have a good year in hearing, also 2026. We will, of course, come back and. Communicate around that with our 26 guidance.

But certainly recognizing to keep up the great momentum, we need to continue to launch appreciated products and need to continue with a good execution in the market. So that’s where we have all our focus. Then if I comment on the enterprise and the US sell-out and sell-in. It’s, of course, nothing we can fully predict or certainly not control. But given the inventory levels we have now in the North America channel, we do believe that we’re coming to some level of end of this channel inventory reductions in North America. So I think that is a fair assumption. If we look more globally, we have similar and stable inventory levels in Europe as we’ve been having over the past few quarters, as well as in APAC. There can be periods that we’ve been through now where there are some changes.

So this has been a bit more than normal. But I do think that what we see now in the US is most likely coming to some type of end here soon.

Conference Operator: The next question we have is from Martin Barkway of SEB. Please go ahead.

Analyst: Yes. Martin Barkway from SEB. Just also coming back to hearing because I just wanted to discuss the gross margin. And. You, of course, say that. The strong growth driven by Vivia, but you also on the. Explanation for the declining gross margin talk about. Changed business mix. So can you. Elaborate a little bit of what kind of changed business mix you’re seeing? It looks like low price sales to some channels in Europe, given the growth you also have that market. That was one question. And then the second question just on telecom visibility. Peter, you basically say, well, you also say at Q2 that you have orders in the book to. Deliver nice sales in Q4 as well for telecom. What are you thinking of the business you can put into. 2026? Was 25 just as one-off year?

Peter Karlströmer, Group CEO, GN: Thanks, Martin. Starting with the gross margin on hearing. Yes, it’s a combination essentially of the revenue mix and the revenue mix having a different gross margin for us. And. Normally that balances out. We’ve now been in a period where we certainly have been growing more in. Countries and channel types that have a bit of a lower gross margin. I think this is more an effect of market. Dynamics rather than any changes in priorities for us. We still strive to have a very kind of well-balanced and broad growth composition. So we certainly believe this will balance over time. The other thing I would highlight also is that the softness we’re seeing in Jabra Enhance is also having a negative impact on the gross margin. So I think it’s really the totality of this.

What we have not done is to take in, what should we say, a different stance on pricing. And certainly neither to, what should we say, in a deliberate way, taking very large orders to very low margins. It is really more an evolution and the consequence of the market growth we are operating in essentially. Then on Falcom, you were a little bit breaking up when you asked the question, but let me try to answer it. And if I don’t get it right, please follow up on it. And for Q4, as we mentioned in the report today, we’ve already secured orders that will help us to have a very healthy Q4. I would say in the magnitude of the same level as we had in Q2. And it’s actually several orders, but it’s a larger order.

It’s actually not the same customer that ordered from us creating the large order in Q2, which I think is also positive. So we continue to make, I would say, very healthy progress here of Falcom. I think you asked about 26. We will, of course, come back and give a bit of a more precise commentary on that when we give our guidance for 26. But I can say generally the pipeline build in Falcom is healthy. And it’s a portfolio of opportunity we’re working. And in totality, I believe the pipeline should be able to be there to continue a good kind of revenue base for Falcom into 26 as well.

Conference Operator: The next question we have is from Nils Granholm Leif of DNB Carnegie. Please go ahead.

Analyst: Thank you. On tariffs, you talk about a 1% effect for the full year, half of it being temporary. So what are the prospects of. Neutralizing the effect of tariffs through pricing initiatives in 26? My second question would be on warranty provisions. And that’s related obviously to the wind down of consumer. So that’s 50 million kroner this year. Should we. Assume any warranty provisions for next year, or will it be completed. As we. Turn the year? Thank you.

Peter Karlströmer, Group CEO, GN: Thanks, Nils. Let me start with the tariff one and then pass it on to Søren for the provisions. Yeah, we can confirm that this year we have an impact of tariffs on the group margin around 1%. And we communicated before that we have cost of more temporary nature, like movement of supply chain and similar. Of around half a percent. So the residual is at half a percentage point. Most of that residual is sitting in the gaming division, where it’s been difficult for us to fully compensate with price increases, the tariff impact. And. There also. Essentially. The price increases we are making are having an elasticity, which makes it a little bit more challenging to fully use that lever to get into balance. So. I don’t have a precise answer, if I’m being honest.

We’re still evaluating exactly what we can do with pricing to mitigate the tariff and how we can do that best. But what I would add, in addition to this, we have several other levers for gaming we’re working on to improving the profitability, more related to supply chain, inventory management, and other aspects and how we’re operating. And then I would also say that over time, as we’re launching new products into the gaming segment, the life cycle of the products here is more like 12 to 18 months or similar. We will, of course, try to launch new products to price levels so we can get into balance with the margin. So if we use on the total set of levers, we remain very committed here to. Restore a healthy margin for the gaming division.

Søren Jelert, Group CFO, GN: And Nils, well remembered on the impacts of the wind down on the consumer, where we also back then said that we would have some run-off costs this year as part of the warranty. And we are expecting that that goes towards zero next year as we are at the end of the warranty period. So that should confirm that.

Conference Operator: The next question we have is from Martinine Ruller of Jefferies. Please go ahead.

Hi, I hope that you can hear me okay. It’s Martinine from Jefferies. I would ask you if that’s okay for you, and I’ll start with the first one and give you some time to answer it. If I remember correctly, one of your main competitors in enterprise in gaming said during their last set of results that. They saw actually some. Slowdowns in volumes in gaming at the beginning of the calendar Q3 due to the pricing initiatives they also took to offset tariffs. And I was wondering, given you passed, if I remember correctly, 10% price hikes in both divisions earlier this year, I was wondering if you could also elaborate a bit on whether you’ve seen or not actually volume softening in both enterprise and gaming.

Peter Karlströmer, Group CEO, GN: Yes. I think you described it very well. And. I know that several of our competitors have, of course, also made price increases, and some of them have made comments like this. Our experience, and I alluded a little bit to the answer of the previous question here, is that on the enterprise side, we have actually managed to do this well. We have made price increases. We have seen some kind of volume impact of it, but. Way less than the price increases. So overall, as a lever, this has been working well. And I think been working well also for our peers in the industry. I think for the gaming products, which are more consumer products. It has been a little bit more difficult for two reasons. I mean, one is that. The consumers are, of course, a bit challenged in the US.

The consumer sentiment is not in the strongest levels. So when things are getting more expensive, I think it’s a high risk that they buy less. And the other thing that’s been a bit difficult is that several of the retailers have been very reluctant also to support price increases, essentially because they’re worried about the same thing. So net-net, the price increases have been a bit more challenging in the gaming side than on the enterprise side. With that said, we have successfully increased prices. We have increased prices with a bit more than 10%. So I do think it has worked okay for us. But it has not worked in a way that it’s fully mitigating the impact of tariffs, as I mentioned here on the previous question. So we’re trying to find our ways.

And we also have taken a stance that we did some changes, and we’re evaluating that. And then when we have the full result of that, we will, of course, determine our pricing strategy going forward. But as I also mentioned here on the previous question, what we believe might be the best way to handle this is to make sure that for future products we introduce, we introduce them to both a price and margin that support the kind of margin profile we like to see.

That’s perfect. And one quick question just from a pure modeling perspective. It has been two quarters that we’ve had massive differences between. The DKK 150 million you expected per quarter in terms of net financials. If I remember correctly, in Q3, we were talking about. A bit more than 200 million in terms of net financials. So I was wondering if you could just give us a hint at how should we think about financials going into Q4, whether we should expect any kind of the one-off that we’ve seen in Q3 and Q2 or not.

Søren Jelert, Group CFO, GN: Yeah, I think thank you for the question. And you are right that the financial items, of course, have been reported out here. And overall, our estimate for the year is around 650 for this year. And you also write that in this quarter alone, there was some one-off as a consequence of us. Signing the loans. We stand firm on that already from quarter four, we’ll see an improvement in the financial items. And we’re also standing firm on that the. Impacts of financial items for next year in totality is around the 450 million. With what we see now and with the currency developments we know today. So I think. In totality, I think we are at the same opinion as we were last quarter.

Now we’ve signed the loans, and that was a consequence of this year reversal on some of these costs associated with the own loans.

Okay.

Conference Operator: The next question we have is from Susanna Lundvik of Bernstein. Please go ahead.

Susanna Lundvik, Analyst, Bernstein: Good morning and thanks for taking my questions. I have two pleas both on hearing. I guess first, I just wanted to follow up on the question related to the very strong growth in Europe versus the market. Just wondering if you’ve had any recent large contract wins among maybe some larger retailers that are leading to the outperformance versus the market. It was sort of very steady, I guess, between Q3 and Q2. And then second, one of your peers has recently talked about adopting more of a multi-price, multi-brand approach to gain sort of share in the market, particularly at lower price points. And I was wondering if you could talk about how you see this potentially changing the competitive landscape for GN, particularly given your channel mix.

Peter Karlströmer, Group CEO, GN: Thank you. No, as we said before, we can confirm that the growth was indeed very healthy in Europe. I mean, I don’t like to comment on individual customers. We are normally not doing that. But I can say it was a combination of larger and, what should I say, a broad base of smaller customers across these markets. I think the way you should think about this more is that in some of the European markets, I think we’ve been going from relatively low market shares. And I think we now, with a strong platform and a series of strong platforms, have been able to significantly grow our market shares in some of these markets. So we think that that is very encouraging for us and something we are very pleased to see. So I think it’s really the combination of channel types.

And it’s not like one big deal explaining the totality or anything like that. It is more broad based. Then to the second question. Just to make sure I understand it right, I think it’s correct, of course, that there are different kinds of price points in the market. And. We, and I’m sure also our peers, are really trying to see how we can operate there both with different brands and different offerings. That’s certainly how we think about it as well. What I would add to this also is that. It’s very important for us also to, depending on channel type, ask ourselves how can we. How should I say, cost-efficiently cover this opportunity in terms of sales model. We work in a direct sales. We have distributor-led markets.

And also for some of the larger key accounts, it’s, of course, also different models to work where we can operate with a somewhat different cost to serve. So it’s really the combination of offerings and how we go to market. That I think it’s the key to success to do this in a good way, basically.

Conference Operator: The next question we have is from Julian Ouédor of Bank of America. Please go ahead.

Hi, good morning. Thanks a lot for taking my questions. I have a couple in enterprise. And the first one is a follow-up to Veronica’s question on the inventory. I mean, when we look at North America, it has been four consecutive quarters with positive sellouts. And I think you said in your answer that you’re getting close to the end of the inventory reduction. As per your slide, you’re more exposed to Europe, where sellout is still negative. So do we need to see several quarters of positive sellouts before Europe can also potentially return to growth? That’s the first question. The second one is. So still enterprise, more on the replacement cycle. Based on your internal data, I mean, could you tell us how the replacement cycle has evolved in recent years? And given your, I mean, you expect to launch a pretty good platform in the coming.

Months, do you think you can shorten this replacement cycle? So any thought about how it can evolve in the. Coming years, like where it is today and where it can evolve, that would be super helpful. Thank you.

Peter Karlströmer, Group CEO, GN: Thanks a lot. First, on the inventories. Yes, to reiterate what I said before, we do believe that the North American inventory reduction will come to some level of stabilization and end. Given the inventory levels we have at this point in time. Will we see the same thing in Europe? I think the honest question is that we don’t fully know. And also, as I said before, I think it’s a very important principle when you work in a two-tier system is that. You neither cannot or are allowed to control the inventory levels. That is, of course, the decisions of the distributors. What I can say, though, is that the inventory levels have been stable for a longer period of time. So that’s good. It’s not like they’ve been working up to a very excessive level or so. And I also believe that. To manage.

Inventories is, of course, a little bit more difficult in Europe, given that there are so many countries. So you need likely to have a bit of a higher inventory level on Europe if you’re looking across than what’s possible in North America. So inventory levels today are higher in Europe than they are in North America. But that’s probably quite normal and probably something you see across categories. So I wish we could be more precise. But again, over time, this will always balance out. What we really focused on. Is, of course, to work well with the channels and then essentially also help them and support them so there is a healthy sellout growth, which will always be the lead indicator from what we can sell in. Then to the replacement cycles, they’ve been relatively stable over the last few years, around three years for headsets. And.

What essentially is driving someone to replace a headset is either it breaks down, which they rarely do. They’re built with very good quality. Or it is because people are changing jobs. Often people get a new headset at the new workplace. And the last one is that people change because there is something better in the market they like to have. So you upgrade more from a functionality point of view. The latter one is, of course, what we hope to influence with the evolved launch we have here in front of us. So that’s really what we like to see. And that’s also why we believe it will support growth, essentially. We do think there will be a healthy reason to upgrade with these types of new products, basically.

Conference Operator: The last question we have is from Martin Brynnewa of Nordea. Please go ahead.

Thank you very much for taking my questions, Peter and Søren. I have two questions left from this. First of all. With the upcoming product launch in enterprise. You say that you already have some early customer feedback. Can you maybe elaborate a little bit on. The size of the population, so to speak, in this test and. Whether you believe that the encouraging feedback on the product is actually something that will. Be able to translate into sales? That’s the first question. And then secondly, will we get an update on targets at the annual report, given that a lot of things have moved? And at that point in time, you have had time to. Mitigate more on the tariffs, different. Ethics situation also since you hosted your Capital Markets Day. Thank you.

Peter Karlströmer, Group CEO, GN: Thanks a lot, Martin. Let me start and then hand it over to Søren. The feedback, it’s been a relatively extensive group of customers having a chance to look on these Sunday NDAs and also some of our channel partners. And as I said, the feedback is very positive. What we’re trying to do here with the product range is. Very much to improve the performance. Also comfort and, as I mentioned, even looks of the products. And I do think the positive feedback is in that direction that, yes, that is really what we’re able to do. And that is encouraging. Does this translate into a good kind of commercial performance? Yes, we like very much to believe that. I think that’s, of course, what we believe in to put investments to develop this range. So that is certainly our belief.

I think it’s important, though, to say that this is. A new range that will be launched over 12 to 18 months or so. And it will take some time before. The big selling products of the range are into the market and fully ramped up. So I think the effect of this will build up over time. So it will not come immediately, like in one quarter or something like that. But I do think it’s fair to assume that it should, in a healthy way, support 26.

Søren Jelert, Group CFO, GN: And then I think to your question on the. Long-term targets, that’s still our ambition and that’s what we are working towards. So in that sense, the annual report doesn’t mark a new. Report out on that. I think we, as a company, are faring in the right direction to deliver on those. And that’s the way we at least assess it in the company.

Conference Operator: Thank you. We have some more questions on the line. The next question we have is from Richard Feldton of Goldman Sachs. Please go ahead.

Thank you very much. Thanks for squeezing me in. Tea for me, please. First of all. I was wondering if you could put some sort of high-level thoughts around headwinds and tailwinds for margins into 2026. You already touched on the tariff dynamics, but any other key drivers that we should be aware of thinking about margin progression next year? And the second one, sorry, just to clarify, what do you expect for underlying finance costs in Q4? Just want to check I heard correctly, but I think you referenced some benefit already in Q4 from the refinancing that you announced in Q3. Thank you.

Søren Jelert, Group CFO, GN: I can start with the latter question. I hope at least I almost hinted at it when I replied earlier in the call. We will see good improvement in the fourth quarter. And that’s also why we believe that for the full year of next year, the 450 million is a good. Guesstimate. And then, of course, as you have an ambition at least to reduce debt, of course, you will be a little bit more having lower interest towards the end of next year and a little higher. So, I mean, in many ways. A good one is, of course, to take these 450 and divide it by four. And then you see that. Impact, of course. Already in the fourth quarter. So I think that’s pretty close to the wind at least sailing here.

And then on margin for next year, of course, we are not reporting out on our expectations for next year. I think Peter also spoke to it in terms of our growth ambitions. We have actually all along had growth ambitions across our three business units. And that’s also where we do expect still some. Operating leverage going into. 2026.

Conference Operator: Thank you. The last question we have is from Oliver Metzger of Oddo BHS. Please go ahead.

Good morning. Thanks for squeezing me in. I joined the call a little bit later. One question I have is one of my EUHA takeaways because we saw there. Plenty of Chinese players. And what I’ve also heard that the OTC category in the US. Is. Evolving, particularly at lower price points, more dynamic than potentially thought. So we haven’t talked for a while about. Your OTC offering and how it has performed. But it would be great to have your thoughts on whether. You see some of these developments at lower price points also evolving. And given also your experience you have from. Enterprise or the gaming side for. Devices at lower price points, what would be your thoughts on this? Thank you.

Peter Karlströmer, Group CEO, GN: Thanks a lot. So. I think that if we look on the OTC, as I spoke about here a bit earlier and answered also some related questions, I think we recognize that this year for us has been a more difficult year in OTC and certainly a year where we even see some level of headwind to growth. We had that in the quarter also. I think you’re right in the way that OTC, it’s a broad umbrella of different types of products. We are very much taking a stance that we’d like to offer still a very good quality experience, both in terms of the hearing aids, but also the interaction and support we are giving to the customers, even in the OTC channel. There certainly are alternatives in there, which are much more entry-level offerings. That we do think.

Is inferior, but it’s for sure true also that they are on cheaper price points. We think it’s a little bit too early to evaluate. And like in many markets, we also believe that they can coexist in a healthy way. But it’s certainly something we have a look on. And. We could, of course, also develop lower-end offerings if we believe that is commercially the most attractive opportunity. But we’re not at a point where that is our conviction at this point in time. But certainly share your observations. So I think that’s very much the situation.

Conference Operator: Thank you. At this time, we have no further questions on the lines.

Søren Jelert, Group CFO, GN: Thank you very much, Oliver Reheardy. And thank you, everybody, on the.

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