Interim Report Q1 2025: Growth challenged by market uncertainty – proactive cost mitigation initiated to support long-term margins

Highlights

• The Hearing division delivered -1% organic revenue growth driven by a strong initial uptake of ReSound Vivia, but off-set by a challenged U.S. market as well as some slowdown of existing products in anticipation of ReSound Vivia. The strong uptake of ReSound Vivia has continued into April, lending support for expected market share gains. As a consequence of the launch initiatives and the challenged U.S. market, the divisional profit margin ended at 28.4%.
• The Enterprise division was challenged in the quarter with -9% organic revenue growth due to a demanding comparison base from several large deals in Q1 2024 and the current global macroeconomic uncertainty. The sell-out growth was stronger at -5%. As a result of strong pricing discipline and cost focus, the divisional profit margin ended at 32.9%.
• The Gaming division experienced 11% organic revenue growth excluding the wind-down of the Talk and Elite product lines in a challenged gaming gear market – especially in the U.S. due to the sharp decline in consumer sentiment in the second half of the quarter. The divisional profit margin (excluding wind-down effects) ended at 12.9% supported by strong pricing discipline as well as one-company supply chain benefits.
• Group reported EBITA ended at DKK 300 million (EBITA margin of 8%), reflecting the negative operating leverage.
• Free cash flow excl. M&A ended at DKK -395 million driven by strong cost focus, but off-set by traditional seasonality on working capital, higher interest payments and timing of corporate tax payment. Net interest-bearing debt ended at DKK 10.1 billion, equal an adj. leverage of 4.1x.
• The direct impact from the recent escalation of tariffs was limited in the quarter. However, in order to protect future profits, significant actions are being executed: 1) Acceleration of diversification of manufacturing footprint, 2) U.S. price increases for Enterprise and Gaming and 3) Group-wide cost and cash initiatives.
• As a consequence of the direct and indirect tariff impact, group financial guidance is adjusted. GN now expects group organic revenue growth of -3% to +3%, an EBITA margin of 11% to 13%, and an unchanged free cash flow excl. M&A guidance of DKK ~800 million.

Financial guidance for 2025

Organic revenue growth excl. wind-down		EBITA margin		Free cash flow excl. M&A (DKK million)
Updated	Prior	Updated	Prior	Confirmed	Prior
-3% to +3%	3% to 7%	11% to 13%	12% to 14%	~800	~800

Key revenue assumptions for financial guidance 2025

Hearing division
In 2025, GN expects the hearing aid markets to grow in line with the historical growth rates supported by ongoing favorable demographic trends. As such, GN projects 4-6% market volume growth and -1% market ASP decline, equaling a market value growth of 3-5%. Based on the attractive market fundamentals, the current sales momentum, as well as the launch of ReSound Vivia and ReSound Savi, GN expects to continue to gain market share in 2025. Consequently, the Hearing division assumes to contribute with organic revenue growth of 5% to 9%.

Enterprise division
Following a longer period of market stabilization, the current market environment creates uncertainty that makes companies postpone certain IT projects - including peripherals categories. As a consequence, GN assumes a negative impact on the addressable market for the remainder of the year. In addition, GN will make a prioritization of product variants shipped to the U.S., until the supply chain diversification is concluded, which is expected to temporary impact revenue negatively. The end customers are expected to experience limited disruption due to currently available channel inventory. Consequently, the Enterprise division assumes to contribute with organic revenue growth of -8% to 0%.

Gaming division
Due to the recent sharp decline in consumer sentiment in the U.S. as well as the general uncertainty in the global economy, GN expects its gaming gear market to be negatively impacted. In addition, GN will make a prioritization of product variants offered to its U.S. customers, until the supply chain diversification is concluded, which is expected to temporary impact revenue in the short-term. Consequently, the Gaming division assumes to contribute with organic revenue growth of -6% to +2% (excluding the impact from the wind-down).

Quotes from Executive Management
Peter Karlstromer, CEO of GN Store Nord, comments: ”While we are not pleased with our Q1 financial results that are impacted by a variety of short-term effects, we are confident in the underlying strength of our business and the actions we are taking to navigate the uncertain global trade environment.

Positively and promising for the future, the launch of ReSound Vivia is progressing very well and is even exceeding the launch metrices from prior successful product introductions. We are also encouraged by the sell-out growth in the U.S. and Rest of World in the enterprise business, and we are excited to see that our gaming business is delivering profitable growth despite a challenged market.

During the past 18 months, we have proactively diversified our manufacturing footprint. We now accelerate these initiatives to further mitigate the negative impact from the increased tariffs. We also implement targeted price increases in the U.S. across Enterprise and Gaming as well as cost saving initiatives to protect and expand our margins over time. While the short-term market and business outlook is uncertain, we remain confident in the attractiveness of our markets and our ability to drive profitable growth over time.”

Financial overview Q1 2025

	GN Store Nord			Hearing division			Enterprise division			Gaming division
										Gaming			Consumer
DKK million	Q1 2025	Q1 2024	Growth	Q1 2025	Q1 2024	Growth	Q1 2025	Q1 2024	Growth	Q1 2025	Q1 2024	Growth	Q1 2025	Q1 2024	Growth
Revenue	3,986	4,303	-7%	1,703	1,737	-2%	1,666	1,811	-8%	620	551	13%	-3	204	-101%
Organic growth	-3%	5%		-1%	14%		-9%	-1%		11%	3%		-101%	-3%
Gross profit	2,190	2,275	-4%	1,032	1,089	-5%	931	992	-6%	222	137	62%	5	57	NA
Gross profit margin	54.9%	52.9%	2.0%p	60.6%	62.7%	-2.1%p	55.9%	54.8%	1.1%p	35.8%	24.9%	10.9%p	NA	27.9%	NA
Divisional profit	1,096	1,249	-12%	484	599	-19%	548	638	-14%	80			-16
Divisional profit margin	27.5%	29.0%	-1.5%p	28.4%	34.5%	-6.1%p	32.9%	35.2%	-2.3%p	12.9%			NA
EBITA	300	538	-44%
EBITA margin	7.5%	12.5%	-5.0%p
Free cash flow excl. M&A	-395	46	-441

Teleconference
GN Store Nord will host a teleconference at 11.00 a.m. CET on May 1, 2025. Please visit www.gn.com/investor to access the teleconference. Presentation material will be available on the website prior to the start of the teleconference.

For further information, please contact:

Investor Relations
Rune Sandager +45 45 75 92 57


Media Relations
Steen Frentz Laursen +45 20 65 34 20

Forward-looking statements
The forward-looking statements in this report reflect the management's current expectations of certain future events and financial results. Statements regarding the future are, naturally, subject to risks and uncertainties, which may result in considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events, which may prove incorrect. Changes to such expectations and assumptions will not be disclosed on an ongoing basis, unless required pursuant to general disclosure obligations to which GN is subject.

Factors that may cause actual results to deviate materially from expectations include – but are not limited to – general economic developments and developments in the financial markets as well as foreign exchange rates, technological developments, changes and amendments to legislation and regulations governing GN’s markets, changes in the demand for GN's products, competition, fluctuations in sub-contractor supplies, and developments in ongoing litigation (including but not limited to class action and patent infringement litigation in the United States).

For more information, please see the "Management's report" and "Risk management” sections in the Annual Report. This Report should not be considered an offer to sell securities in GN.

About GN
GN brings people closer through our leading intelligent hearing, audio, video, and gaming solutions. Inspired by people and driven by innovation, we deliver technologies that enhance the senses of hearing and sight. We help people with hearing loss overcome real-life challenges, improve communication and collaboration for businesses, and provide great experiences for audio and gaming enthusiasts. GN was founded more than 150 years ago with a vision to connect the world. Today, inspired by our strong heritage, GN touches more lives than ever with our unique expertise and the broadest portfolio of products and services in our history – bringing people closer to what is important to them.

We market our solutions with the brands Jabra, ReSound, SteelSeries, Beltone, Interton, BlueParrott, Danavox, and FalCom in 100 countries. Founded in 1869, GN Group employs more than 7,000 people and is listed on Nasdaq Copenhagen (GN.CO).

Visit our homepage GN.com and connect with us on LinkedIn, Facebook and X.

Attachment

• GN Interim Report Q1 2025