Gn Store Nord A/S Adr

Hello everyone and welcome to GN's conference call in relation to our annual report announced this morning. Participating in today's call is Group CEO Peter Karlstrammer, Group CFO Søren Hedert and myself, Rune Søren, Head of Investor Relations. The presentation is expected to last about 25 minutes, after which we'll turn to the Q&A session. The presentation is already uploaded on GN.com. And with that, I'm happy to hand over to Peter for some opening remarks.

Thank you, Rune, and thank you all for joining us today. 25 were a year where we continued to execute on our strategic and operational agenda in a difficult market environment influenced by uncertain trade and macroeconomic weakness. In hearing, we continue to deliver very strong performance and we are now at record high market shares driven by recent Vivia that was launched in the beginning of the year. Our premium products sell very well and our margin is under control in spite of an adverse country and business growth mix in 2025. Our product and software platforms are in strong shape and we plan to launch further innovation in 2026 that will support our growth. In enterprise, the US and APAC market continue to grow modestly throughout the year, while the European market still experiences some weakness. We are pleased with our own execution in this environment and well prepared to benefit from a continued gradual strengthening of the market. In 2025, we successfully accelerated several supply chain and pricing initiatives to manage the uncertain trade environment. We have managed this well and have mitigated most of this change. We have a strong pipeline of products in video and headsets that we will launch in 26. The most important one for our financial results is the Vol3 headset platform, which we announced a few weeks ago and will start to ship later in this quarter. Additional launches under this new platform will follow later in the year. In gaming, we continue to gain market shares in a challenging gaming equipment market. While gaming also faced some of the same margin headwinds as enterprise, we have executed sustainable margin initiatives and operational resilience initiatives supporting our long-term margin aspirations for the division. In addition, we have also launched exciting products in gaming, including our new gaming headset, the Nova Elite, which is very much a premium offering. Also here, our product pipeline is strong, and we look forward to exciting launches in 26. The markets that our three divisions operate in have been challenged in 2025. While we aspire to a little bit stronger absolute numbers in the year, we feel very good about our relative performance across our divisions and focus on the things that are within our own control. We have taken several supply chain and operational improvement initiatives that we will benefit from in the years to come. In addition, our product pipeline across our three divisions is stronger than it's been for a very long time. We remain firm in our beliefs that our markets remain attractive and look forward to further developing our business in 26 and the years to come. With this introduction, I'm happy to hand it to Søren for further details on our performance in the group.

Thank you, Peter, and thank you all for joining us today. Essentially, as Peter mentions, we are satisfied with what we achieved during 25 under these challenging circumstances. The group delivered a negative 1% organic growth for the year, supported by a 5% organic growth from our hearing divisions, a negative 6% organic growth from our enterprise divisions and a negative 2% organic growth from our gaming division. Our profitability, we are pleased with where we landed for the year with an EBITDA margin of 11.4%, as this essentially demonstrates strong mitigation of what is within our own control. We have successfully increased prices and kept a strong focus on cost while harvesting group-wide benefits from the scale of GM. The profitability also positively influenced the free cash flow generation where we ended the year with 1.1 billion DKK in free cash flow. Moving to the financial details on slide 6. Starting with results of the fourth quarter of 25, the group delivered organic revenue growth of a negative 2%, reflecting solid execution across our divisions in some difficult market conditions. The EBITDA margin ended at 13.4%, reflecting a group-wide cost focus offset by an extraordinary R&D write-down due to the new partnership with Hotly in our video collaboration business. Lastly, the group generated free cash flow excluding M&A of 744 million DKK, reflecting the strong profitability and positive development from our working capital. For the full year, the group landed at an organic revenue growth of negative 1% in line with our financial guidance. The group delivered an EBITDA margin of 11.4%, which reflects prudent cost management while strengthening business fundamentals and preparing for future growth. The free cash flow excluding M&A generated for the year was 1.1 billion DKK, driven by solid earnings and positive impact from working capital. In 2025, we have decreased our net interest-bearing debt by more than 800 million, which also allow us to refinance our main loan facilities during the year with attractive terms. In summary, at a group level, we delivered solid profitability and good cash generation while continuing to improve the balance sheet. We also accelerated our efforts to ensure a flexible and diversified operational setup while making important progress on our product roadmaps, paving the way for growth opportunities in 2026 and beyond. And with those group highlights, I'm happy to hand you over to Peter for some additional color on the three divisions.

Thank you, sir. Let me start with our hearing division. In Q4, we finished the year well with 7% organic revenue growth, reflecting a market that continued to grow slightly below its normal trends. The vision of profit margin for the quarter was 35.2%, reflecting a focused cost control. When looking back at 25 as whole, we can conclude that Heron grew faster than the market and continued to gain market share. The full year organic growth was 5% in a market growing slightly slower than normal. The gross margin ended at 61.1%, which was below 24% due to an adverse development in the country and business mix, as well as the divestment of Dansk Hörde Center. Division of profit margin ended at 33.6% due to prudent management on sales and distribution costs, offset by the gross margin development and ongoing investments to support the strong momentum of our ReasonVivia platform. The division of profit margin was slightly below 24, which is explained by margin underperformance in the difficult and unusual Q1 that we and the market experienced. In the last three quarters of 25, we delivered a slightly better division of profit margin compared to the same period in 24. We are confident in the underlying margin structure and plan for margin improvement in 26 and beyond. Let's move to the next slide for some highlights in the performance on enterprise. The enterprise division ended the year with a fourth quarter organic growth of negative 3%. This includes a larger Falcom order that continued its good progress. Our enterprise business grew in North America and APAC, while the weakness in EMEA continued. Sell-out in the quarter was a few percentage points stronger than the sell-in, reflecting some channel inventory reductions in EMEA. Channel inventories were stable in North America and APAC. The division of profit ended at 33.3% for the quarter, reflecting positive contributions from price increases and cost control, and offset by direct tariff costs. For the year of 25, Enterprise managed to maintain its market-leading position in a challenge European market, while executing positive sell-out growth in North America and APAC, resulting in organic revenue growth of negative 6%. As part of these numbers, it's worth highlighting that our sell-out growth numbers were around 3% better than this, so global channel inventories have decreased compared to last year. The gross margin increased 0.3% at this point compared to 24% in spite of the extra tariff cost. We are pleased about how we mitigated uncertain trade environment through accelerated diversification of our supply chain and targeted price increases. The development and division of profit margin reflects focused cost control, negative operating leverage, and costs related to the upcoming launch of the Vol-3 platform. Moving to the next slide and gaming. In our gaming division, we delivered organic revenue growth of negative 12% in the fourth quarter, reflecting a difficult gaming equipment market influenced by low consumer sentiment, as well as a very demanding comparison base, as we delivered 16% organic growth in the same quarter, 24. In the quarter, we demonstrated good cost control, delivering a divisional profit margin of 16.4%, despite the direct tariff cost. For the year, we have increased our market share in a difficult market, resulting in organic revenue growth of negative 2%. We increased the gross margin for the division due to strong pricing discipline and benefits from the supply chain integration with enterprise, partly offset by direct tariff cost. The division of profit margin for the year reflects investments in product launches and extra costs related to managing the difficult trading environment. Let me move to the next item on the agenda, where we'll provide some more flavor on the divisional growth ambitions for 26 and beyond. Starting with hearing. In 25, the market grew slightly less than normal. We still very much believe in the underlying growth drivers of the market with increased adoption and a growing elderly middle class around the world. This will continue to support healthy market growth over time. We are pleased that we have managed to outgrow these attractive markets for the last years, driven by strong commercial execution and product innovation. With the help of our latest platform, ReasonVivia, we have further strengthened our position and our momentum remains strong around the world. As announced earlier this week, we will now also expand the SAVI portfolio, which will support growth especially in countries and channels looking for more affordable product solutions. On top of these exciting portfolio additions, we have even more innovative product launches planned for the second half of 26. Altogether, this gives us high confidence that we can continue to grow above the market and strengthen our competitive position in the coming years further. Let's turn to the development of the enterprise business. I think it's worthwhile taking a step back and looking at how our headset business has been shaped over the last decade. We have been one of the frontrunners establishing the market and driving the professional headset penetration. And the navel of this have been technology shifts, where we have been successful in developing products that caters for customers' needs over time. Back in 2014, we launched our award-winning Evolve portfolio that supported the rapid adoption of different UC platforms driven by large technology infrastructure companies. What was unique and industry-leading at that time was the easy integration of a headset portfolio in the different user platforms. We also launched ANC and a strong microphone pickup. The result was clear. Professional headsets quickly became popular and a standard for the knowledge workers wanting a high-quality experience. Moving into 2020 and the hybrid work age, as we would call it, this was accelerated by COVID-19. This period in time required new technology for headset performance and integration. In early 2020, we launched the Evolve 2 portfolio that significantly increased headset performance across multiple dimensions. As a result, global headset penetration increased further to around 20% where it is today. And now with a fast developing AI solution, we're entering what we believe is the next era. We call this the modern work shift. And with the increased adoption of AI solution, we believe that the next headset penetration will be driven by new technology demands. For it to succeed, you need to have a headset that fits the evolving trends of tomorrow. Let me give you a few examples. 99% of knowledge workers acknowledge that poor sound is impacting online meetings. 7-8% of knowledge workers from multiple locations, which means that the design of headsets is important and that a headset needs to handle ever-changing noise situations in different environments. Currently, we are also seeing a return to office trend among many companies, as well as a trend that the majority of new offices being built are having more open landscapes and less square meters per worker. This means that all of us need great solutions for working in these open spaces that are comfortable and where we can have online meetings where all background noise is filtering out. And that would help you to come across very clearly even in these challenging environments. AI workflows will also be a driving force. Voice is three times faster than typing, making AI voice interaction much more efficient than if we type. Simply, we will likely speak more to our computers and devices and type less. This puts new requirements on the headsets in terms of how they can handle this with great accuracy. It would also like to increase the sound level in open spaces further, and further increasing the need of a great headset that can handle that. Lastly, cybersecurity is important today and will likely increase even more into the future and grow in importance, while an enterprise-grade framework for security is becoming an essential to be in this market. We have talked to numerous customers, partners, and analysts over the years to form a strong view on what's needed, and we believe that what we have announced last week is really the headset that can take us into the new modern work area. Our latest enterprise-grade headset launch, the Vol-3, is designed to take the user experience to a new level while playing up against future technology trends. And it's not just another hardware update that is slightly better all around. The Vol-3 is also based to close the 10 years of research and development in its underlying technology. First and foremost, the AI-driven deep learning technology had been trained on more than 60 million real-world sentences, taking microphone technology to a completely new level with outstanding ability to separate speech from noise. And this is quite impressive considering that it's also been possible even without the traditional boom arm. These headsets captures 99% of words accurately in an open office environment, making it built for voice-led AI and screen productivity in any environment. In addition, it is the first of its kind to feature adaptive noise cancellation while you're on a call, and it comes with improved connectivity and a significant step up in battery life, with the possibility of a full day use from only 10 minutes of charging. In addition to impressive technical development, Evolve Free is also designed to be compelling. It is released in black and warm gray with a modern design. It's also designed for comfort. It is light and comfortable to wear all day. From March, the VOL3 will be globally available in our high-end form factors, the 85, which has an over-the-air fit and is designed for immersed focus, and the 75, which has an over-the-air fit if you prefer a lighter wear and greater environmental awareness. We call this the best headset for modern work and it's really built to match the pace and flexibility of what we all require. So let me move to the next page. As the working habits change, we need technology that adapts well. Whether you are in an airport, working at home, in the office, or somewhere else, Evolve Free is a perfect companion. Even in very noisy environments, voice clarity, state-of-the-art view, or DNN-based voice processing take in the benefits from the wider GN group. As an example, you can literally stand in a room with loud music playing in the background, And the person that you're speaking to will only be able to hear you and what you are saying and not the music at all. The same applies when you're taking a call outside a windy day in a noisy coffee shop or basically anywhere in any situation you can imagine. It's only you that are being heard. And perhaps most important, the strong sound process that makes the headset the perfect companion for working also in the normal open landscape where you likely will be shielded from the noise around you and when you make calls you need to be heard without any background noise and the chatter to enter your meeting. The sound performance is so strong that you do not even need to mute when you are not talking any longer. The participants in the meeting will essentially only hear your voice and nothing more. We cannot be more excited about this launch and have more confidence in that it is really taking the headset to the next level and help us with the growth for the enterprise division in 26 and beyond. It is developed to be the next penetration wave, while it also will assist the ongoing replacement of existing legacy products. And stay tuned, because more will also come. We will, as normal, launch across mid- and entry-level price points later, and a more affordable price point will come over time in the next 15 months. Let's move to the next slide, where we'll also talk more about our aspirations for the gaming business. SteelSeries have been on a journey with increasing market shares for quite some time now. Since 2019, we have increased our market shares significantly in our core categories of headset and keyboards due to our best-in-class innovation. In MICE, we have been defending our position during the last five years. This will be one of the focus areas for the coming periods as we obviously want to improve our position in this market as well. The core gaming equipment market remains structurally attractive, supported by continued growth in the number of gamers, time spent on gaming, and a growing appetite for premium features. These dynamics underpins a healthy long-term growth profile for the market, even though the near-term environment is held back by a muted consumer sentiment, in particular in the US. Against that backdrop, SteelSeries continues to win, and we expect our current momentum to continue in 2026 and beyond, and we continue to deliver new product innovation in the market that will support its growth. SteelSeries is not just another gaming equipment option. In SteelSeries, we continue to challenge status quo and expand our categories into new and better options. For 2026 and beyond, we expect to harvest broad-based market share gains by strong brand momentum and significant launches across categories and into new form factors on top of the grown core portfolio. While it is, of course, important that gaming returns to deliver strong growth, the division has also been a journey to increase margins of the coming part of GN. We have come a long way by fully integrating gaming into the same systems and product flows as the enterprise business, and there are even more margin benefits to come over time by fully utilizing the GN at scale. In addition, we will continue a strong pricing discipline to mitigate impact from direct tariff costs and other unforeseen future external headwinds that could be a threat to our margins. Moving to next slides. Let me go through the assumptions for 2026. In 2026, we are planning for growth across our three divisions. We are convinced about our strong product portfolio that will help us to further gain market share in flat, slightly growing markets. For the hearing aid market, we expect the market growth for 2026 to be at the low end of the structural value growth of 3-5%, due to the current low level of consumer sentiment around the world. In this market, We assume that we can continue to gain market share driven by our current momentum and further product innovation. And this is why assuming an organic revenue growth for the years between 3 and 7%. For the enterprise market, we believe that the growth patterns that we have observed outside EMEA in 2025 will continue. We also believe in some level of stabilization of the macroeconomic environment in the EMEA region to materialize during the year. All in all, we believe the global enterprise market will likely grow between flat and 2% in 2026. In this market, we assume we can gain market shares driven by the launch of our Evolve Free headset platform and the gradual strengthening of our video portfolio. As a result, we're assuming an organic revenue growth for enterprise between 0% and 6%. For gaming, we expect the market growth for 26 to be modest, influenced by the current low consumer sentiment in the near term. In this market, we assume a continued market share gain zone, driven by current momentum and a strong product innovation. And we believe that for gaming, we can grow between 7 and 13% in the year. And with that, I'm happy to hand it back to CERN to speak more about our guidance for 26.

Thank you, Peter. All in all, when we apply these divisional assumptions, it leads to our guidance for the group, where we guide for an organic revenue growth of 3% to 7%, driven by a continued strong execution and market share gains across our three divisions, as mentioned by Peter. Moreover, we are guiding for a reported EBITDA margin of between 11.5% to 13.5%, driven by a continued cost flows and operational leverage offset by some short-term headwinds. All in all, the financial guidance supports our ambition to grow in a sustainable and profitable way that eventually will lead to realization of our long-term targets. On the next slide, I'll provide you with some more details on the elements that drives our 26 EBITDA marketing guidance. First and foremost, we are pleased with our ability to mitigate the impact on tariff in 2025 by effective price increases and a successful acceleration of our diversification of our supply chain. Specifically in 26, we will experience a margin tailwind from the temporary cost taken in 25 to relocate our production lines. That tailwind is then more or less offset by the full year effect of tariff as these were only really impacting our COX from the third quarter of 25. Then we will have a net negative effect from a step up in absolute amortizations following the product finalizations of a number of projects including the recent EVO3 portfolio. This is, by definition, a non-cash effect, but is following our accounting principles. Taking these factors into account, we do believe that we can drive a very healthy underlying growth in 26, which will materialize across course margins and operating leverage. Depending on the growth development in the year, we will be able to expand our underlying EBITDA margin by 1 to 3 percentage points. This, once again, underpins our strong group-wide margin platform potential. We remain firm on our long-term structural margin target of 16-17%. With the underlying margin target we are guiding for this year, we are convinced that we can continue to drive yearly margins expansions beyond 26 as a result of healthy top-line growth and prudent OPEX management. On top of this, we will naturally look for gross margin opportunities as well. So to conclude, following a difficult 25 due to a wide range of external headwinds, We are excited about the prospects of the coming year. With growth coming back to our three divisions, we will be able to deliver a strong, profitable growth while continuing our focus on strong cash flow generation and thereby continuing the leveraging. And with that, happy to hand you back to Rune.

Thank you, Peter and Søren, for the updates. This was the end of the presentation. I will hand you over to the operator for the Q&A. Please limit your questions to two at a time, please.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone telephone. If you are using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your questions, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from the line of Angela Bosnovi with BNPB. Please go ahead.

Hi, good morning, and thank you for taking my questions, maybe one on enterprise and one on hearing. So on enterprise, having in mind the Q4 performance, can you give us more details on underlying assumptions supporting the guidance and phasing of the growth throughout 2026? Just more broadly, what is your take on the expected decline in the PC volumes following the memory price hike? How do you see this affecting IT budgets and GM markets in particular? And on hearing, can you maybe discuss the moving parts going into 2026 and the phasing of growth and any indication of what is dictating your guidance in terms of market share gains, competitor launches, and market growth assumptions forward, both at the top end and bottom end? Thank you.

Thank you so much. Great questions and quite a lot unpacked there. Let me start with enterprise. We recognize that 25 was of course not the year where we delivered the growth which we aspired for, but with that there were still some positive things happening in the year. We saw the US market and the APAC market actually growing throughout the whole year. So the difficulties were in EMEA. We did see some underlying improvements throughout the year. Q4 ended a bit weaker than what we anticipated. Still, if we look back over the years, it has improved. And then, of course, also with our launches here, I talked a lot in the opening about Evolve Free. We also have video products which we are launching this year. We do believe that will support and grow also on top of the market improvement. In terms of the sequencing, I think it's fair to expect that it will be a gradual return to growth, so we will build up the growth over the year, so in some ways the second half will be stronger than the first half. We also expect more product launches throughout the years, and the launches we have made now, while the products I think are truly fantastic, It is a premium product that's still a smaller part of the total enterprise volume. So all in all, I think we will build up the growth in enterprise throughout the year. Then you asked about the relationship to PC shipments. I think we need to admit that we have seen a correlation before over time. We saw a little bit less of that last year and it's probably also linked to quite an accelerated forced upgrades of a lot of PCs with a significant amount of budget for many companies spent on this. So it's probably crowded out spending in other categories. So while now perhaps pieces decline a bit, we do not necessarily see this as something negative for us. So we believe in the underlying growth here and the gradual improvement of our market. Then if I move to hearing, I think it's fair to say that there is, of course, a lot of many moving pieces when we're building up our growth aspiration here for the year. I mean, as we talked to, we believe that the market underlyingly is growing slightly below its normal trends. And we're talking about the lower end of the three to five percent value growth, which we consider to be normal. And you asked about what we have factored in. We have tried to factor in everything that we know, of course. We do assume some competitive launches. We do assume, of course, some larger customers making different type of decisions with opening up for more entrants. So we have tried to factor in everything we can. But we are, of course, also factoring in our own new innovation and our own launches. And we are entering the year with a good momentum. We had 7% growth in Q4. We're entering with that momentum into this year and feel good about the momentum of Vivia. And with more innovation throughout the year, we think we can support a healthy growth over the year. So in hearing in terms of sequencing, I think you should probably expect a fairly even momentum throughout the year. Every quarter we see a good opportunity to grow in, essentially. Thank you.

Thank you.

Thank you. Next question comes on the line of Martin Plenow, but Nadia, please go ahead.

Hi, Simon, Peter. Thank you for the presentation, and thank you for taking my questions. I have a quite long question here, so I think I'll just limit myself to this one question, and then I'll jump back in the queue. In your Q3 report, you wrote that Guyen has minority investments in non-core assets that may contain significant value and could be divested. I've done some channel checks which are indicating that Nations Benefits is a billion-dollar valuation company which is looking for external funding here in 2026, and this should translate into a potential divestment opportunity to do with Guyen. potentially billions in BKK, based on my analysis at least. I know it's a bit out of your hands whether this happens or not, but could you maybe just confirm whether you expect a funding round in 2026 and whether you expect to monetize that opportunity when it arises? And then just as part of that, I guess it would also explain why you're not having a cash flow guidance for this year, which indicating that you are a bit more comfortable with your leverage ratio. And if possible, I know I'm asking for a lot here, but could you maybe just provide some details on what you think such an opportunity would affect your deleveraging path from here and how you, if you monetize it. Otherwise, potentially just give some basic information about the revenue and the growth of this minority investments.

Sir Martin, thanks a lot, and thanks for laying this out and your work around this. We started to talk about nations because we realized it started to build up to a valuable asset that we wanted to be very open about. But we've also been clear on that there are some unknowns also for us. This is a company that is privately held. It is, of course, we have an ownership share of about 19%. We have a founder in that that's been there since the beginning and another large investor also. So we're one of the larger investors. I think we are very happy, of course, with the underlying performance of the company. We do not want to comment on the details here since it's not a public company. I think that all of you can approach Nations for requests directly from them. But I can just confirm that our view is that the underlying performance of nations is strong and is strengthening over time and has been a very successful business build-up. So that's probably all we can say. And then in terms of how we think about our ownership, this is not... strategic to us in terms of that is interlinked a lot with our existing business. At the beginning nations were very hearing aid focused but they've grown to be much more than that today and as such there is not a very strong link to our existing business. at the right point in time to the right valuation, we would be open to consider if we're the right owner. But it's not anything we are unilaterally seeking. We probably will do that in great harmony with other key owners and the founder, which we respect a lot. We will update you over time as opportunities will present themselves. There is nothing very imminent around this, but it could very well be over time. I hand it back to Søren for more commenting on the cash flow guidance and how to think about it.

Yeah, I think in many ways you're absolutely correct that we do not guide for cash flow this year. And just to echo what Peter said, In the event something would happen, it would be M&A. And as such, we would always guide excluding M&A. So in that sense alone, it is not interlinked. But that's fundamentally not why we are not guiding for free cash flow this year. It's more the fact that we now, the last three years, have generated more than plus 1 billion DKK in free cash flow. We have demonstrated that when we have the margins that we've had, that we can generate the cash flow. In addition to that, we have also now made a new loan agreement that in many ways is also testimony to that our endeavor to go towards 2.0 leverage by 2028 is definitely on the right track. And it was our opinion that where we need to focus now is to generate growth and the earnings. And when we do that, it will yield cash flow. And rest assured, we'll stay focused on getting to the deleveraging of 2.0 as fast as we can.

Thank you very much for taking my questions.

I'll jump back in the queue. Thank you. Next question comes from the line of .

Good morning, and thank you for taking my questions. Firstly, can you talk us through the drivers of hearing aid market outperformance and any regional performance that you can highlight? Your market outlook is for another year in 2026. It would be great if you can walk us through how you see Europe within this and whether you're seeing any signs of improvement. And then secondly, on margins, given this should be a strong year of launches across your businesses, can you talk us through some of the building blocks for expansion in the margin over the course of 2026? And I appreciate this is a wide range for the year, but the gap to the midterm ambition remains pretty large. So any updated thoughts on the bridge to 2028 would be very helpful.

Thank you. Thanks a lot. And let me start in the order you're asking this essentially. So if you take hearing, if you look on 25, as you have heard us talk about before, in the first three quarters, this was very much Europe and international markets providing the growth for our business. We have been doing very well there. I think what's positive is that in Q4 we saw a bit of a stronger performance and growth contribution also from the U.S. side of our business. And if we look into then next year, I would say market-wise we do expect the U.S. to be a little bit stronger than it was in 25. As we remember, Q1 in particular was a very difficult quarter in the U.S., But generally still the global market outlook, as we're saying, we do believe it's adding up to slightly below the structural growth of the market. That's our planning assumptions. Then in terms of our own plan for how to outgrow that market, I would say it's broad-based. We like to see outperformance versus the market growth in each of the region. and also very focused to drive success in each of the channel types, everything from larger key accounts to more smaller independent. So this has been the approach we've taken the last few years. It's very important for us to have that kind of balanced exposure and balanced ambition for our growth across, and the same is how we think about 26. And then you asked about Europe specifically. I think it's clear that Europe has been... I think lately a little bit better. I would say that the markets where we have been doing very well, in particular in Germany, that has been a growth driver for us and we continue to have very good momentum there. I think it's probably what I would highlight, but generally, I mean, the European markets for us has provided quite healthy support for our growth. I think it's also fair to say that in some European markets we have a bit of a lower market share, also presenting an opportunity for us to catch up a little bit to what we think are natural market shares for us.

And then when it comes to the margins, I think a couple of questions here, one link to this year's margin. And for us, I think it's important to also recognize that we all the time have said that gaming is an area where we will, through the good synergies with enterprise, improve, amongst others, our gross margin. And as such, we also do believe that the group as a whole will be able to improve its gross margin in 2026. Then in addition to that, actually, we also do see an opportunity on leverage of the OPEX base, essentially. But to your point, we have factored in that we are launching. And then bear also in mind that within here, we did launch Vivia in 25. So those costs were actually sitting in 25 as well. So in many ways we are at a level of the cost base which we believe is adequate to actually support the growth that we are striving for within the three divisions. Then when you look at the long-term margin aspiration of 16 to 17 percent, I think fundamentally it's also important the decomposition we did of the aspirations for 26, where we have some cost items, amortizations as one, but I do believe when you come out to the outer years that we will be able to leverage the top-line growth and as such be able to generate These margin increments, as you see, so fundamentally the underlying performance of our business should be able to get us to the 16% to 17%, which we believe is right for GN as a group.

Perfect. Thank you. Thank you. Next question comes from the line of Karsten Longbrook-Madsen, Janske Bank. Please go ahead.

Excellent. Thank you very much. Yeah, a quick follow-up on nations and the value here. Maybe, I know you can't really talk about the value of it, but what will happen tax-wise if you realize a gain on this term? Should we strike some tax on that? Then we know that. And then I have a question on Hotly. You talk a lot about Hotly, and you also mentioned BDO as a growth driver for you in something we have here on the outside been waiting for a very long time. How meaningful is this collaboration and do you expect and have you factored in some of the meaningful growth of the radio segment into the enterprise outlook for this year?

That's it. Okay. Thank you, Carsten. Let me start with the video and then hand it back to CERN for nations and tax. I think that the Hadley partnership is meaningful in the way that it's addressing a gap which we've been having for a while, which is to work with companies in large video rooms. And Hadley is a company, it's a smaller company but with great technology for how you can add cameras into video rooms. So we essentially have integrated this into our existing video platforms together with AR&D. So it helps us a lot to now be able to address the full needs of companies and it's been very well received when we're talking to customers and our presenters. We are launching this now in Barcelona this week at the big conference here at ISE. And we also have own other video launches, some which we have made and some that's coming. I think it's meaningful for the video business, what we're launching. It should definitely support the growth of the video business. If you look on the total growth support for both enterprise and for the group, we need to remember that video is still a relatively small part in absolute numbers, so to say. But it certainly are important steps to see some acceleration of growth on the video side. But if you look into the growth ambition of our enterprise of 0% to 6%, we are counting on some contribution from video, but the majority will come from the core of the business, which still is a headset.

And then, Karsten, when it comes to your further deep dive on nation question, I mean, I'll refer back to the question of the answer that Peter gave before. And as such, neither are we speculating in a potential tax implication of this. And as such, our planning on group level is still with around these 22%, as we have also reported out on this year.

A small thing about whether we should, when we calculate the value, whether we should just assume that the value is the value or whether we should subtract 20% of the tax.

Again, I wouldn't speculate in the value is the value. I mean, honestly, we do not have a comment on the value as such and when it will materialize on nations. So that's the way we look at it. Okay. Thank you.

Thank you. Next question comes from the line of Veronica Duvayova with City Peace Corps.

Hey, guys. Good morning, and thank you for taking my questions. I will keep it to two, please. One, I just was hoping you could quantify the contributions from Falcom to the fourth quarter revenues and then what your expectations are for 2026 and whether those have changed in any way and kind of maybe just gate some sort of risks to the upside and the downside around that just so that we can think about that since it was a driver for And then I apologize, but I have to go back to sort of the expectations around the enterprise business growth, I guess. You know, there is a lot of concern and uncertainty in the sort of broader IT spending market. I guess it would be helpful to understand, you know, the conversations that you're having with your distributors, with some of the larger customers. What are you picking up in terms of corporate's willingness to spend, especially as they face – a lot of other competing priorities for investments, whether, you know, that's PC units or it's things like AI. I'd be kind of good to understand what you're hearing there, just to give us a bit more confidence in your kind of what seems to be a very clear message that enterprise should grow this year after many years of decline. Thank you so much.

Hi, Veronica. Thank you so much. Starting with Falcom, as you remember, we had a very good quarter in Q2 where we talked about more than 100 million of business. In Q4, we had a similar quarter, so also a very good quarter. We did pre-announce that already earlier in the year because we We had more or less agreements for that order in a firm way already then. But it was delivered and revenued in Q4. So if you look on the year in total, we made a bit more than $200 million on Falcon for the full year of 2025. And if we look into 26, at the minimum we see that we should be able to do the same level of revenue, but our base case scenario is probably to grow that a bit further. So I would say it could have some small growth contribution to the overall group growth, I think we also need to remember Falcom is still relatively small in absolute terms. It's not a real needle mover, but we continue to see very positive development of Falcom and we are pleased about that and very focused on continuing to growing it of course. And then if I move to enterprise, I appreciate a lot your questions around this and also how to think about this. I do think that we can approach this both top down, what we hear from leading analysts in terms of IT budgets, how much they spend on software versus hardware and so on. And if you do that, I think you're coming to a conclusion that IT hardware is probably modestly growing in most of the forecasts, but relatively low growth numbers. And then if we observe it more from our own trends and the markets where we operate, which is predominantly headsets and video, as I talked about before, the market has been growing in the US and APAC, which is great to see actually the stability of that growth. It's been going on every quarter for more than a year. And then EMEA has been the troubling area for us and the whole industry. And it's still not in growth in EMEA. So I would say that that's perhaps the major uncertainty here and what the market growth will end up with. But our best assumption, if we take the growing North American APAC and an improvement in Europe, is market growth then for around 0% to 2%. And that is also consistent with what we are picking up with our largest distributors and resellers and when we speak to large customers and trying to both plan our own business but also talk about how they see and observe the future. So that's the market, and then we are guiding slightly above that because we feel very good about the products we are launching. I hope you all have a chance to test them at some point in time soon because we really think that this is not just like another product, so to say, another headset, but it really is taking the performance to next levels. The initial reception has been very positive. It will take some time to build up the volume on this new line of products in Evolve 3. We will see some limited contribution already in Q1, but more throughout the year essentially. So that's the combined thinking resulting into the guidance and 0-6% growth for enterprise.

Got it. And can I just maybe ask a very quick kind of financial modeling question? Would you expect enterprise to grow already in the first quarter? And I guess maybe, I don't know, Sorin, if you want to comment on the phasing of growth for you specifically, given some of the destocking dynamics you saw in the fourth quarter.

We don't know and we're not guiding per quarter per se but we do believe you will see gradual strengthening of it and at this point in time we have some level of negative growth momentum and we need to turn that into a flat to growing momentum. If that is happening in Q1 specifically or a little bit later in the year, we are not really guiding a lot. It will be gradual. I do think, though, I could have talked about that also in the overall dynamics. It's worthwhile to highlight that we did see some channel distorting for the full year of 2025. So that affected our growth in enterprise with a few percentage points. And what we have assumed for next year are fairly stable channel inventories, and that is also what is a little bit helping to create the range of the guidance of what is happening to the channel inventories.

Got it. Thank you so much.

Thank you. Next question comes from the line of Jack Reynolds-Cluck, RBC Capital Markets. Please go ahead.

I had a couple also on enterprise, please, across the U.S. and Europe. So within the U.S., can you quantify the positive growth coming out of the quarter? And has that sell-out growth translated into a recovery in selling so far in Q1? And if not, how much of these stocking is there left in the U.S.? ? And then within Europe, again, in enterprise, you mentioned some sellout growth recovering there. Can you point to which markets are seeing sellout growth and kind of quantify that recovery? And, again, are you seeing any kind of translation into sell-in growth recovery and or kind of how much destocking or how much inventory are your distributors holding there? Thank you.

Thank you. So on the US market in the quarter we did see sellout growth and we also had the selling growth and they were actually fairly aligned those two numbers. So the channel inventories in the quarter in the US were stable. We saw some more significant channel reductions in the beginning of the year, 25 in the US, but towards the end of the year they have actually stabilized. So the delta of sell-out and sell-in in the last quarter were predominantly in EMEA, and there we saw it with several percentage point differences. And then to the markets have been going best. The last few quarters, a highlight of EMEA has been Germany, which is very encouraging for us because it is the largest market in EMEA. It is also a market where we have a very strong position. So that market has been both in sell-out and selling growth in the last few periods. UK has also improved a lot lately. And then I would say the Nordics and a few others of the more central European countries have been also improving. and then we've been having a bit of further challenges in southern Europe. But I think that overall, if you look in EMEA, it is ending stronger than it started 25, so to say, and that's why we're talking about some level of improvement in trends. But the channel the stock can have impacted also the numbers in EMEA.

Thanks very much. Thank you. Next question comes from the line of Martin Parkhoy with FEB. Please go ahead.

Great. Thank you very much, Martin Packer, ACB. First, a question again to Søren on the margin. I'm still a little bit curious to understand the bridge towards 28. In the short term, which is 26, you have a range of 2 percentage points on the margin, and you believe three years later you have a better transparency, only have 1% range in your margins. So how can that be? How can you, if you land in the low end, like 11.5%, how can you reach up in the 16%? What tools do we have to make such cost control? Then a second question on the hearing aid market. We saw your cross-party going down this year, as you also rightfully say, that used some channel and country mix. And how should we see that mix in 26? Also, if we get a soft hearing aid market, like a soft hearing aid market, again, in 26, as we saw in 25, then there's a tendency to manufacturers starting to compete a little bit more on prices to reach their budgets. What kind of pricing environment have you baked in and marketing have you baked in on hearing aid?

Hi Martin, CERN speaking and that's on the longer term aspiration. I think it's the way we have also decomposed the 26 guidance. We are of the opinion that in the event that we come in lower, it will in our minds also be a question of timing as we will strive for the growth as the key vehicle for us to get to the long term 16 to 17%. Fundamentally, some of the investments we are taking in 2026 in, for instance, operations will yield gross margin improvements when we come out in the outer years closer to the 28. So in reality, we believe we will be able to catch up in the event that we land in the lower end, and we believe that if it's timing, it will definitely be possible. So we are investing in an underlying improvement structure that will yield results towards the 28 target.

Martin, for motor hearing aid margins in 26, as we commented and you also highlighted, in 25 the gross margins reduced due to the growth mix essentially we had in areas where we have low gross margins, channel types and geographies basically. As we're looking into the 26, we do expect a little bit of a reversion of that into the more higher margin areas growing more normally and as such supporting the growth, the gross margins. What I'd also like to highlight here and had that in the opening readout, are the divisional margins, because they were actually, if we look after the difficult Q1, which was challenging in many ways, were actually stable vis-a-vis the year before. And the explanation of that is that some channels where we have low gross margins also have a very compelling cost to serve. And as such, you might get a low gross margin, but you still can protect a very good divisional margin. We remain very focused on both type of margins. They're helping us to manage the business in a good way. But the planning assumption is some type of improvement on the gross margins for the year.

Thank you.

Thank you. Next question comes from the line of Richard Felton with Goldman Sachs. Please go ahead.

thank you very much taking my questions uh two please um the first one is on gaming um i'd like to understand the confidence in the the 2026 guide um i suppose that business was down slightly in 2025 and momentum sort of decelerated into the end of the year um so just trying to understand sort of the gap from 2025 to the the 7 to 13 percent guide for 26 um you know between how much of that is the market getting better how much is uh is market share gains and product launches That's the first one, please. And then the second one, thank you very much for sharing the detail on the Evolve 3 launch. My question is how impactful have launches been historically on the enterprise business? I know for hearing aids you all get quite excited about new platform launches, but thinking about the business model and the type of customer base and enterprise, how important is that launch cycle to drive growth? Thank you.

Thank you so much for the questions here. If we take the gaming first, I think it's a combination of an improving market and then market share gains. If we look on the 25, the market was relatively weak. I mean around the world and in particular in the US and Europe where we have the majority of our business. So we do expect a bit of a stronger market environment. And then also have several great launches in the pipeline for the year across key core categories where we have meaningful business. Then I appreciate also when you're looking at, we all get a bit scared of course about Q4, which looks like a loss of momentum. I think it's important to bear in mind the outstandingly strong quarter Q4 the year before. So the comp was also part of seeing that declining growth. So if you look more on sequential growth, quarter of quarter growth, It looks a little bit less daunting, so to say, to go from where we ended the year to growing into 26. So it is what we believe in as the base assumptions. And then the Vol 3 launch for enterprise, we think it's a very meaningful launch and that this really will support our business. And given that we are the market leader in headsets also, hopefully it can help the whole market to grow. So maybe get a double help here in some way. We have had this headset in early trial programs with both channels and lead customers for a while, and the feedback is overwhelmingly very positive. At the same time, we need to recognize that several years since we launched a line like this, so it's hard for us to analytically come back and say exactly what it would mean, but definitely we are of the firm belief it will be a strong contributor to finding a way back in growth for enterprise, essentially. Thanks very much.

Thank you. Next question comes from the line of Neil Van Homlet with DNB. Can you make it please for me?

Thank you for taking my questions. You are calling out a hit win in your margin for this year because of less positive effect from R&D capitalization. I mean, the effect for 2025 was significant. uh actually a little bit more than two percentage points so would you expect to neutralize the effect completely this year or is it just going to be a less positive effect in 26 so that's my first question and then getting back to the facing in the enterprise division um so how should we think about the growth trend throughout the years? I mean, are you continuing to expect kind of flashes to negative growth in quarter one to improve in the second half? How should we think about that? Thank you.

Thank you for your question. The way we have planned it out and can see it of course operating in the asset base that we have under R&D, we believe that the headwind or the less headwind in this case is to the tune of 1%. So it's not a full erosion of the 2% that you rightfully quote, but think of it at least as 1%. That's for the planning purposes.

And then when it comes to enterprise facing, I think the best way to do it is to expect a gradual build-up of the growth, so a second half stronger than the first half. And I think it's both about generally getting the growth momentum going and also linked to the Vol-3 launch. We will see some impact in Q1, but we will see more impact of the Vol-3 launch later in the year. We will also launch more headsets later in the year, also further contributing to that growth. Then, of course, if we look on the enterprise overall number, I think it's helpful, of course, to keeping a track on the large two Falcon orders in the comparison base from last year. And if we look on Falcon for 26, I said we aspire to have at least the same level of revenue, but also Falcon will likely be bigger in the second half than in the first half for 26. So that's probably as much as we can help you here, but do expect a gradual buildup of the growth momentum. I think that's the conclusion here.

But shouldn't we expect any channel filling from the Vault 3 launch already here in Core 1?

Some level, definitely. But again, as I said, the Vault 3, 85 and 75, these are the premium products, which is meaningful, but the smaller part of the total enterprise sales. The mid-tier is where we have most of our Vault 3 sales. and these type of products will launch at the later point in time. So that's what I meant with the selling will contribute in Q1 to some extent, but I think you will have even stronger vol-free contributions later in the year.

Thank you.

Thank you. Next question comes from the line of Julian O'Jor with Bank of America. Please go ahead.

Good morning. Thank you very much. And I'm sorry, guys, I come last. It won't be too different from my peers. I want to focus on the enterprise guide again. I just think you need to give us a little bit more confidence for that. Just if I summarize, you're talking about gradual market improvement, 1Q unlikely to grow, back-end loaded year for enterprise and gaming. I think 4Q was softer than expected and not yet significant improvement in EMEA with declining PC shipments for next year. That's basically what I take from the call. I'm just wondering why putting such guide with ambitious market and Shared Gas expectations instead of trying maybe to rebate expectations for beat and raise if the market recovers and the share gains materialize later. So that's just a question about just your thoughts behind how the guide was set and the VBT you have today given that it was a little bit challenged to call the market in recent years. So that's the first question. The second one, switching to hearing, you're the largest OTC player out there probably. Could you maybe address what you're seeing on this channel in the U.S. and globally? And I'm asking the question because we're seeing some slowdown in the hearing aids market. AI seems to have a locked possibility for smaller OTC players to get out with pretty good products from a performance standpoint. So my question is just do you see some traction from small computers, and could it be one of the reasons the U.S. market was soft? for prescription hearing aids recently thank you thank you so much

Back to enterprise, and I run the risk of repeating some of the things I said before, but we've really tried to take all facts into account. I mean, both what we are picking up top-down from all the sources we have available to us, and then discussions with partners, distributors, and customers, and finally what we observe ourselves in the underlying momentum of the business. As I highlighted before, we do see the US and APEC market in growth. So it's been a lot about EMEA. And what we do believe and have into the guidance is some gradual improvement in EMEA. It doesn't say that the market will enter high growth. We are saying a global growth of flat to 0%. You can even cater for some level of decline in EMEA for the year, for the flat scenario there. And then we very much believe in the launches we are doing across the portfolio, and we do believe that the guidance we are giving with the midpoint as the most likely is our best effort here to give a meaningful guidance. We could, of course, have given an even broader range, but we do think the best way we can help you and the market is to guide like this in what we believe will be the most likely outcome. Then, if I move to the OTC side, I can speak about the own business first. We have shared with you that we saw a little bit of a disappointing growth momentum in the first three quarters of 2025. We actually had a fairly good quarter in Q4, so we re-entered a double-digit growth in our Jabra Enhanced, our OTC offering. But I think I would say that still, if we look on the whole for both the market and our business, I think we've seen actually relatively similar dynamics to what we've seen in the overall hearing aid market. In the beginning of the year, in particular in Q1, also the OTC business was really negatively impacted. Then the Q2 and Q3, I mean, our business, but I would also believe that's true for the overall business, didn't really perform in the normal ways. And now we're seeing a little bit of stronger momentum in the OTC. But to be fair, we actually see that in the U.S. business overall for ourselves. I personally do not believe it is, what should we say, cannibalizing significantly the traditional market. I think it continues to be a compliment. It's interesting for us when we analyze our customer data and so we do see that the customers buying from OTC are a bit different from the traditional hearing aids. In particular, it seems to be people that are younger. On average, it's about 10 year younger profile. And so there probably are some differences in the user base also. I appreciate there might be some limited overlap, but this is our best read on the market, so we don't think it will be the key explanation of the performance of the traditional hearing aid market, so to say.

Perfect. Thanks a lot. If I may just squeeze the very last one. Do you have any view on the Section 232, maybe the potential impact on the protocol for the hearing aids? Could you change your tariff for 26?

No, we don't have any privileged insights in this. We're, of course, observing this also, so I have no further insights or comments.

Thank you. Thank you. Next question comes from the line of Martini and Drula with Jefferies. Please go back.

Hi, I hope that you can hear me okay. There are some other questions I've already been addressed, so I'll probably keep it to Two quick ones, and just to be as well conscious of time. So the first one is on a formerly called a lively business, which if I remember correctly was supposed to be breakeven by late 25, early 26. Could you elaborate a bit on how much of a drag it was for 2025? And if you have considered any potential scenarios for a divestment or something like that into 2026 and beyond for this business? And the second question would be on the gaming. I appreciate that you've been gaining consistently shares in the headset and keyboard categories, but I was a bit surprised to see that your share in the mice category has remained stable. As such, I would appreciate if you could remind us of the revenue contribution of each of these categories and elaborate on why you haven't been able to grow your share in mice.

Thank you. Thank you so much. Now, starting on the lively business, which is what we call the Jabra Enhanced today, And as I mentioned, this year we have not been able to have the same growth profile as in the previous years. The positive fact is that Q4 we are back to the W growth which we like to see. But given that the slow growth profile this year, our break even has been a bit delayed. We talked about that it will happen late 25, early 26. I would say with the growth momentum we have now, it's probably a bit later in 26 or early in 27. But what is positive is that the P&L works, so to say. It will help to break even with the growth of volume. So we've been very focused on getting the business back to growth, and it's encouraging to see that now in Q4. Then on the gaming side, I mean, you're absolutely correct. I mean, the key category for us in gaming are headsets, and here we're really the leader for premium headsets in gaming, and we are also large in headsets overall. So that is the largest category for gaming. And then keyboards has been another category where we've really been building up a good business over time and very meaningful. You highlight mice as an area where there should be a growth opportunity, and I would say I agree with that. I don't want to forego future launches, but it was a while ago since we launched new products into the mice area, so I think you should expect us to have something going there that can help us to capture that opportunity, essentially. I very much agree with your observation that that is a growth opportunity for us.

Okay, perfect.

Thank you very much. Thank you. This concludes our question and answer session. I would now like to turn the conference back over to the management for closing comments.

Thank you very much, operator, and thanks, everybody, on the call.