In This Article:
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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GN Store Nord AS (GGNDF) has implemented price increases in the enterprise segment without significant impact on volumes, indicating strong demand resilience.
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The company is diversifying its supply chain to mitigate tariff impacts, with plans to supply the US market from locations outside China by the end of the year.
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GN Store Nord AS (GGNDF) expects a free cash flow of EUR800 million, suggesting strong financial health and liquidity.
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The US hearing market showed positive growth in April, indicating a recovery from the mid-single digit decline in Q1.
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The company has a manufacturing setup for hearing aids that is currently exempt from tariffs, reducing cost pressures in this segment.
Negative Points
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There is uncertainty regarding the impact of price increases on enterprise volumes, which could affect future sales.
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The company faces challenges from elevated tariffs, which have impacted margins and require strategic supply chain adjustments.
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The US private market experienced a mid-single digit decline in Q1, reflecting potential volatility and market pressure.
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Transition costs associated with moving manufacturing locations could impact cash flow, although they are included in current guidance.
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The EBIT margin guidance is partly dependent on achieving the upper end of the 5% to 9% organic growth target in the hearing segment, which may be challenging.
Q & A Highlights
Q: What impact do you expect from price increases in the enterprise segment on volumes, and how should we think about margin trajectory in 2026 relative to 2025? A: Peter Karlstromer, CEO: Historically, a 10% price increase in the enterprise segment hasn't significantly impacted volumes. We anticipate minimal volume drop due to similar measures by competitors. For 2026, the impact of tariffs will be mitigated by our diversified supply chain, reducing reliance on China for US supplies. We expect less impact from tariffs in 2026, and our guidance doesn't currently include new equity considerations.
Q: Can you provide an outlook for market growth this year, especially after the US private market's decline in Q1? Also, are transition costs for manufacturing included in your cash flow guidance? A: Peter Karlstromer, CEO: The US hearing market was under pressure in Q1, but April showed positive growth. We expect a normal market unless unexpected macroeconomic changes occur. European markets faced less pressure and are expected to perform normally. Transition costs are limited and included in our cash flow guidance.