GN Store Nord — Earnings Release 2014

Feb 18, 2015

Copenhagen, 2015-02-18 07:30 CET (GLOBE NEWSWIRE) --
-- GN Store Nord delivered on all parameters for its first year of the
Strategy 2014 – 2016: INNOVATION & GROWTH
-- GN ReSound now launches ReSound LiNX2™ – the fourth generation 2.4 GHz
technology hearing aid
-- GN confirms and upgrades its financial targets for 2016

In 2014, GN ReSound revolutionized the hearing aid industry with the launch of
the world’s first Made for iPhone hearing aids, ReSound LiNX™ and Beltone
First™. The products drove significant financial results making GN ReSound the
fastest growing hearing aid manufacturer in 2014. Additionally, the products
helped creating a more positive perception of hearing aids, not least through
significant media exposure.

Today, GN ReSound is announcing the next generation of hearing aids; the fourth
generation of 2.4 GHz technology, ReSound LiNX2™ and Beltone Legend™. As a
result of GN’s outstanding R&D productivity, the products will be launched in a
full family of form factors already from March 2015 in all primary markets. The
fourth generation of 2.4 GHz technology combines all the best connectivity
opportunities with new features added to empower the hearing impaired. Surround
Sound by ReSound™ is enhanced by a new innovative feature, Spatial Sense™,
which takes the localization ability of the user to an unprecedented level.
Spatial Sense utilizes the 2.4 GHz technology based ear-to-ear connectivity to
effectively preserve the natural volume and timing of the signals that make it
possible for the brain to localize the direction of the sound.

GN Netcom delivered its strongest financial results ever driven by 39% organic
growth in Unified Communications (UC) headsets in 2014. With the significant
growth, GN Netcom also established itself as the world’s number one in the fast
growing market for UC headsets. The initial results of the launch of the two
new innovative key products, Jabra Evolve™ for UC and Jabra Sport Pulse™
Wireless in the Sports Audio segment, have been very strong and highly
encouraging for the development in 2015.

The board of directors will propose to pay out a dividend of DKK 151 million
for 2014 equivalent to DKK 0.90 per share. Based on the solid financial
development in GN as well as the favorable capital markets, GN now intends to
take the net interest-bearing debt to between 1.5 and 2.0 times EBITDA by the
end of 2016.

Financial highlights Q4 2014

-- GN delivered a very strong finish to the year generating 13% organic growth
and EBITA of DKK 477 million in Q4 2014
-- GN ReSound delivered 8% organic growth and EBITA of DKK 291 million in Q4.
The full-year 2014 results was thus taken above the guidance with organic
growth of 8% and EBITA of DKK 897 million
-- GN Netcom achieved its strongest quarter ever with 20% organic growth and
EBITA of DKK 201 million. Full-year organic growth ended at 11% and EBITA
was DKK 521 million

Guidance 2015

GN’s financial guidance for 2015 reflects the continued strong underlying
development of the company. The foreign exchange development will have a
significant positive impact on the revenue. EBITA will not be impacted in 2015
implying that the EBITA margin in the businesses will be diluted due to the
hedging practice.

Organic growth

-- GN ReSound: More than 6%
-- GN Netcom: More than 10%
-- GN Store Nord: More than 8%

EBITA

-- GN ReSound: More than DKK 975 million
-- GN Netcom: More than DKK 565 million
-- GN Store Nord: More than DKK 1,480 million

Updated 2016 targets

Today, GN confirms the organic revenue targets announced in November 2013 as
part of the strategy plan for 2014 – 2016: more than 3 percentage points on
average above the market growth in GN ReSound and more than 10% organic revenue
growth p.a. on average in GN Netcom. At the same time, GN increases the EBITA
margin targets for 2016:

-- GN ReSound now expects an underlying EBITA margin improvement of more than
1 percentage point compared to 2014 equivalent to an EBITA margin of more
than 21.5% in 2016 (measured in foreign exchange rates as of February 1,
2015)
-- GN Netcom expects an underlying EBITA margin improvement of around 1
percentage point compared to 2014 equivalent to an EBITA margin target of
“around 19%” measured in foreign exchange rates as of February 1, 2014 – up
from “18 – 19%”. In current foreign exchange rates (February 1, 2015), the
upgraded 2016 EBITA margin target is equivalent to 16.5 – 17.0%