Financial Performance - The group's revenue increased by 1.5% to $2,177.2 million, driven by higher sales in Europe and other regions, which offset lower sales in North America and Asia Pacific [4][6] - Gross profit rose by 8.2% to $686.8 million, with gross profit margin improving from 29.6% to 31.5%, attributed to lower material costs and a favorable product mix [5][6] - Operating profit decreased by 3.8% to $188.7 million, with operating profit margin declining from 9.1% to 8.7%, mainly due to increased advertising and promotional expenses [5][6] - Profit attributable to shareholders fell by 5.9% to $156.8 million, with net profit margin decreasing from 7.8% to 7.2% [6] Business Line Performance - North America sales decreased by 3.2% to $893.1 million, primarily due to lower telecom product sales, despite growth in electronic learning products [6][16] - European market revenue increased by 8.2% to $960.7 million, driven by higher telecom product sales following the Gigaset acquisition [7][26] - Asia Pacific revenue fell by 5.3% to $300.9 million, with declines across all product lines [7][36] - Other regions saw a significant increase in revenue by 31.6% to $22.5 million, attributed to higher sales of electronic learning and telecom products [8][40] Market Performance - North America accounted for 41% of group revenue, while Europe became the largest market, contributing 44.1% [16][26] - The Asia Pacific region represented 13.8% of total revenue, with sales declines in Australia, Hong Kong, and South Korea [36] - Other regions, including Latin America, the Middle East, and Africa, accounted for 1.1% of group revenue, with notable growth in electronic learning products [40] Company Strategy and Industry Competition - The company is focusing on diversifying its manufacturing footprint to mitigate tariff impacts, with production being relocated from China to Malaysia, Mexico, and Germany [15][42] - The strategy includes enhancing product offerings in the telecom sector, particularly leveraging synergies with Gigaset [46] - The company aims to maintain its market share in the US despite challenges posed by tariffs and economic conditions [43][93] Management Commentary on Operating Environment and Future Outlook - Management expressed concerns about the impact of US tariffs and the overall economic outlook, forecasting a decline in revenue for the financial year 2026 [43][44] - The company plans to pass some tariff costs onto customers through higher prices while maintaining a stable profit margin [44][75] - There is an emphasis on expanding in emerging markets and enhancing product lines to drive growth [42][47] Other Important Information - The company remains debt-free with a strong financial position, reporting a net cash balance increase to $335.6 million [10] - Inventory levels increased significantly, with stock turnover days rising to 106 days, indicating a need for better inventory management [8][9] Q&A Session Summary Question: Manufacturing capacity in different regions - The total manufacturing capacity outside China is currently about 25%, expected to increase to over 30% as expansions in Malaysia and Mexico continue [52][53] Question: Impact of tariffs on operations - The company is well-positioned to adapt to changing tariffs due to its vertical integration and global manufacturing sites, with ongoing monitoring of the tariff situation [59][62] Question: Sales impact due to production relocation - There are no expected sales misses as the company has sufficient inventory to meet demand until June, with plans to supplement shipments from Malaysia thereafter [70][71] Question: Gigaset product strategy and integration - The plan to introduce Gigaset's multicell products to the US remains unchanged, with the integration of Gigaset performing better than anticipated [96][97]