GN Store Nord — Earnings Release 2015

Feb 12, 2016

Copenhagen, 2016-02-12 07:30 CET (GLOBE NEWSWIRE) --
-- Reported revenue grew to DKK 8,404 million – an increase of 14% compared to
2014. Organic growth was 6%, in line with guidance
-- Reported EBITA reached DKK 1,457 million, an increase of 16% compared to
2014 in both reported and constant currency terms
-- The strong fundamental results are based on relentless focus on
commercialization of innovation during 2015 – and provides a solid platform
for growth in 2016 and beyond
-- Cash conversion reached industry levels at 51%, an increase of 13
percentage points compared to 2014
-- GN distributed DKK 1.2 billion in share buyback programs and dividend to
its shareholders – an increase of 34% compared to 2014

In recent years, GN has been transformed from a company in restructuring mode
to an industry leader in innovation and growth. 2015 was no exception: GN’s
2014 – 2016 strategy calls for upgrade and relentless focus to improve the
group’s ability to commercialize innovation, and that is what was achieved in
2015.

Today, GN has a joint purpose across the group: Making life sound better. By
combining knowledge in medical hearing instruments with professional and
consumer headset competencies, GN is uniquely positioned to develop intelligent
audio solutions that allow its users to hear more, do more and be more than
they ever thought possible.

In 2015, GN ReSound continued its strong execution of the strategy 2014 – 2016:
INNOVATION & GROWTH, delivering sustainable and profitable growth through the
two strategic focus areas: commercialization and innovative product
development. GN ReSound’s momentum is very strong and during 2015 GN ReSound
captured around half of global unit growth.

The continued improvements in commercialization lead to strong performance
across markets and channels and accelerating growth rates. Major efforts have
been put behind improved market understanding and to establish stronger and
closer relationships with its customers.

GN ReSound’s position as a leader in user-driven innovation was, again, a
cornerstone in the profitable growth generated in 2015. The highly efficient
R&D machine delivered yet another hearing aid family based on 2.4 GHz
technology – ReSound LiNX2, the fourth generation of hearing aids using 2.4 GHz
technology – which became GN ReSound’s most prominent and important launch in
2015.

Executing on the strategy 2014 – 2016: INNOVATION & GROWTH, GN Netcom continued
to invest in growth opportunities, and during the year GN Netcom launched
several innovative products that will strongly support the growth agenda in
CC&O / UC and selective segments for Mobile in 2016.

The first half of 2015 saw unusually soft CC&O / UC market conditions but, as
projected, a return to more normal market conditions was observed in the second
half of 2015. The growth prospects of the UC market remain highly attractive,
supported by significant investments made by the UC infrastructure vendors
during 2015. GN Netcom strengthened its position as the world’s leading UC
supplier – delivering an organic growth in UC of 16% for the year, driven by
23% growth during each of the third and fourth quarter of the year.

In 2015, the Mobile business launched two additional products in the
fast-growing Sports Audio segment. The two new products, Jabra Sport Coach™
Wireless and Jabra Sport Pace™ Wireless, follow Jabra Sport Pulse™ Wireless
(launched in 2014), and Jabra now offers the strongest Sports Audio headset
portfolio in the market. The focus on Sports Audio solutions is part of the
continued efforts to position the Mobile division towards faster growing
segments of the market, and away from the traditional mono headset segment
which is experiencing strong declining trends in most geographies.

At the annual general meeting on March 10, 2016, the Board of Directors will
propose a dividend of DKK 161 million for 2015 equivalent to DKK 0.99 per
share.

Financial highlights Q4 2015

-- GN Store Nord delivered a strong finish to the year generating 7% organic
growth and EBITA of DKK 522 million in Q4 2015
-- GN ReSound delivered 9% organic growth and EBITA of DKK 340 million in Q4
2015. The full-year 2015 organic growth was 8% and EBITA was DKK 995
million
-- GN Netcom delivered 3% organic growth in Q4 2015, despite a difficult
comparison with 20% organic growth in Q4 2014. EBITA reached DKK 210
million in Q4 2015, compared to DKK 201 million in Q4 2014. Full-year
organic growth ended at 2% and EBITA was DKK 540 million

Guidance 2016

GN’s financial guidance for 2016 reflects the continued strong underlying
development of the company, expected continued fundamental attractive market
conditions for hearing aids and the CC&O / UC segment and the somewhat volatile
market conditions for the Mobile segment. The guidance is in line with the
financial targets announced in 2013 as part of GN’s strategy for 2014 – 2016.

GN ReSound will aim to continue to grow at least double the speed of the market
and GN Netcom will aim to continue to grow with double digit growth rate in its
core CC&O / UC business. While continuing to invest in growth, GN ReSound and
GN Netcom will ensure that the EBITA margin continues to be in line with
top-tier competitors.

Guidance for 2016:

DKK million Organic revenue EBITA Profit before Effective tax
growth tax rate

---

GN ReSound Around 6% Around
1,200

---

GN Netcom 7 - 10% Around 590

• CC&O More than 10%

• Mobile 0 - 6%

Other Around (70)

GN Store Around 7% Around Around 1,520 25 - 26%
Nord 1,720

---

Quotes from executive management

Anders Hedegaard, CEO of GN ReSound: “Throughout 2015 we saw excellent
performance, with a particular strong Q4 2015 where organic growth in our
Hearing Instrument business accelerated to 10%. We have solid momentum going
into 2016, where we again expect to significantly outperform the market. The
key focus in 2015 was the commercialization of our new breakthrough 4th
generation of 2.4 GHz hearing aids – ReSound LiNX2. Strong commercial execution
during the year helped us to capture around 50% of the global market unit
growth”.

René Svendsen-Tune, CEO of GN Netcom: “I am pleased that we during 2015 – a
challenging year with unexpectedly soft market conditions – have strengthened
our competitive position. As expected our growth rates in the important CC&O
division normalized in the second half of 2015, after soft market conditions in
the beginning of 2015. In line with our 2014 – 2016 strategy, we have further
improved our ability to commercialize innovation, and we have successfully
launched very attractive and relevant products”.

Teleconference

GN Store Nord will host a teleconference at 12.30 p.m. CET today. Please visit
www.gn.com to access the teleconference. Presentation material will be
available on the website prior to the start of the teleconference.

For further information please contact:

Peter Justesen
VP – Investor Relations & Treasury
GN Store Nord A/S
Tel: +45 45 75 87 16

or

Michael Nass Nielsen
Manager – Investor Relations
GN Store Nord A/S
Tel: +45 45 75 02 40