Demant (DEMANT) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw flat organic growth, with macroeconomic uncertainties and US market weakness leading to a downward revision of full-year guidance.

• Hearing Care delivered 4% organic growth, outpacing the market, while Hearing Aids external revenue declined 4% organically.

• Diagnostics segment remained flat, maintaining market share amid soft demand.

• Acquisitions contributed 2-3% to revenue growth, with strong activity in Hearing Care.

• Underlying business performance was in line with expectations, excluding market and FX headwinds.

Financial highlights

• Group organic growth was 0% in Q1, with reported revenue up 4% year-over-year due to acquisitions and FX.

• Gross margin declined, mainly from negative US market and ASP decline in Hearing Aids.

• EBIT was below expectations, impacted by market slowdown and negative FX effects.

• Cash flow from operations and free cash flow were both higher than last year, supported by working capital improvements.

• Net interest-bearing debt increased due to acquisitions and share buy-backs, but gearing remains within 2.0-2.5 target range.

Outlook and guidance

• Full-year 2025 organic growth guidance revised to 1-5% (was 3-7%), and EBIT to DKK 4,100-4,500 million (was DKK 4,500-4,900 million).

• FX expected to reduce revenue growth by 2% and EBIT by DKK 125 million; tariffs to impact Diagnostics EBIT by DKK 25 million.

• Share buy-backs for 2025 expected to exceed DKK 1,500 million.

• Net profit from discontinued operations expected at DKK 0–50 million.

• Effective tax rate for 2025 expected around 23%.