Conference call presentation

February 7, 2018

Annual Report 2017

2

Safe Harbor Statement

The forward-looking statements in this report reflect the management's current expectations of certain future events and

financial results. Statements regarding the future are, naturally, subject to risks and uncertainties, which may result in

considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions

regarding future events, which may prove incorrect.

Factors that may cause actual results to deviate materially from expectations include – but are not limited to – general

economic developments and developments in the financial markets, technological developments, changes and

amendments to legislation and regulations governing GN’s markets, changes in the demand for GN's products,

competition, fluctuations in sub-contractor supplies and developments in ongoing litigation (including but not limited to class

action and patent infringement litigation in the United States).

This presentation should not be considered an offer to sell or buy securities in GN Store Nord.

Agenda

3

Group highlights 2017

GN Hearing update

GN Audio update

Financial outlook

Group financial highlights FY 2017

4

* Reported EBITA (rolling four quarters) / avg. invested capital

GN Store Nord delivered strong performance in the first year

of the 2017 – 2019 strategy

• Revenue growth was 11% and organic growth was 8%

reflecting a strong development in both GN Hearing and GN

Audio, driven by innovative product portfolios and strong

commercial execution

• Solid gross profit increase driven by strong business

execution

• EBITA increased by 10%, reflecting the revenue

development and was achieved while investing in future

growth opportunities

• Net profit reached DKK 1,122 million, a 3% increase

compared to 2016 impacted by the non-cash US tax reform

net of related items

• EPS growth of 10%. Reported EPS is impacted by the non-

cash US tax reform net of related items

DKK million FY 2017 FY 2016 Growth

Revenue 9,585 8,651 +11%

Organic growth 8% 6%

Gross profit 6,008 5,401 +11%

Gross margin 62.7% 62.4% +0.3%p

EBITA 1,744 1,583 +10%

EBITA margin 18.2% 18.3% (0.1)%p

Profit before tax 1,504 1,395 +8%

Net profit 1,122 1,086 +3%

EPS 8.07 7.34 +10%

ROIC* 20% 20% -

Free cash flow excl. M&A 1,134 1,179 (4)%

NIBD/EBITDA 1.6x 1.9x

Delivering on promises in 2017

5

GN Hearing

• Strong revenue growth of 9%. More than 6% organic growth

– delivered on guidance

• EBITA increased 9% to DKK 1,153 million. EBITA margin of

20.5% – delivered on guidance

GN Audio

• Very strong revenue growth of 14%. 10% organic growth

– delivered on guidance

• EBITA increased 21% to DKK 721 million. EBITA margin of

18.2% – delivered on guidance

GN Store Nord

• Effective tax rate of 25.4%, including a non-cash impact of

3.1 percentage points from the US tax reform net of related

items

2016 20172016 2017

2016 2017 2016 2017

1) Excluding Otometrics. 2) Including “Other”

Revenue (DKKm)1 EBITA margin

Organic

growth

Tax rate (%)1)2)

20.5%5,6155,156 20.6%

EBITA margin

17.1% 18.2%3,495 3,970

Revenue (DKKm)

Organic

growth

22% 25%

(0.1)%p

+1.1%p

+6%

+10%

+3%p

2016 2017

US tax reform net of related items

Impact from US tax reform

6

7.34

FY’17

(reported)

8.07

Operational

performance

0.56

0.49

FY’16

(reported)

Share buyback US tax reform net

of related items

(0.32) 0.32

US tax reform net

of related items

8.39

FY’17

(underlying)

+7.6%

+6.7% (4.3)% +4.3%

14.3%

25.4%22.2%

FY’18 (guidance)

22.3%

FY’17

(reported)

~ 22%

US tax reform net of related

items net of related items

(3.1)%p

FY’16

(reported)

FY’17

(underlying)

Effective tax rate

EPS development (DKK per share)

10.0%

Continued strict focus on cash generation

7

Continuous improvements Continuous improvements Continuous improvements

• Productivity, process optimization and

procurement savings lead to COGS reductions

• Growth, streamlined processes and investments

into IT lead to SG&A efficiency

• Breakthrough innovation delivered while

absolute spending level will be utilized with more

flexibility

• Very capital efficient business due to low

capex requirements

• Ongoing working capital optimizations and

strict control on balance sheet items

• Cash conversion improvements remain a priority

20172016

2.2%

2015

1.4%

Capex1 (excl. R&D) as % of revenue

2014 2017

50%44%

2015

Cash conversion

2016

88%

2014

65%

2015

50%

Cash conversion

GN Hearing

GN Audio

Note 1: Investments in property, plant and equipment

2016

66%

67%

2017

Profit and loss Balance and sheet Cash flow

75%

1.2% 1.1%

2014

20172016

17.7%

2015

17.3%13.2% 11.3%

2014

2016

74%

2014

47%

2015

44%

Cash conversion

GN Store Nord

65%

2017Net working capital as % of revenue

Creating shareholder value through efficient capital structure

8

Dividend distribution

+17%CAGR

DKKm

Share buybacks

+18%CAGR

DKKm

94

146 151161

178

0

50

100

150

200

2013 2014 2015 2016 2017

655748

1,047

1,203 1,265

0

200

400

600

800

1.000

1.200

1.400

2013 2014 2015 2016 2017

• During 2017, GN has distributed DKK 1.4 billion to

shareholders

• DKK 178 million dividend was paid out in March

2017 (DKK 1.15 per share)

• DKK 1,265 million was distributed as share

buybacks

• End 2017, the net interest bearing debt was 1.6x

EBITDA

• Annual General Meeting on March 13, 2018:

• GN will propose a dividend of DKK 1.25 per

share in respect of the fiscal year 2017

• New DKK 1 billion SBB program planned, to be

concluded no later than the AGM 2019

Agenda

9

Group highlights 2017

GN Hearing update

GN Audio update

Financial outlook

GN Hearing financial highlights 2017

GN Hearing ended 2017 with a strong momentum

generated by ReSound LiNX 3D

• Revenue growth was 9%, of which organic growth

was more than 6%. 11% organic growth in Q4 2017

• The strong momentum is driven by the successful

launch of ReSound LiNX 3D

• Solid gross margin increase primarily explained by

the strong business execution and launch momentum,

but to some degree offset by country mix exemplified

by the strong revenue growth in China

• 9% increase in EBITA reflecting strong revenue

growth, while investing in growth initiatives

• Continued high cash generation. 23% increase in

free cash flow, on par with/above industry peers

10

*Reported EBITA (rolling four quarters) / avg. invested capital

Note: continued operations

DKK million FY 2017 FY 2016 Growth

Revenue 5,615 5,156 +9%

Organic growth 6% 6%

Gross profit 3,895 3,558 +9%

Gross margin 69.4% 69.0% +0.4%p

EBITA 1,153 1,062 +9%

EBITA margin 20.5% 20.6% (0.1)%p

ROIC* 17% 17% -

Free cash flow excl. M&A 866 704 +23%

11

Well-balanced growth in 2017 and strongly positioned going into 2018

Leading technology and commercial excellence driving growth

In 2017, GN Hearing captured market share for the 7th consecutive year

Europe

Continued market share gains in

several important markets with

double-digit growth in the Nordics,

Italy and Spain

North America

Commercial market business and

Beltone network driving GN

Hearing’s growth in 2017

Rest of World

Very strong double-digit growth in

China, India and Distributor Sales

The complete ReSound LiNX 3D experience

12

Hearing care wherever you are

Hear more than you ever thought possible

Enhanced hearing and fitting experience

ReSound LiNX 3D rollout as planned

13

• ReSound LiNX 3D now available in all

major countries

• Included in Veterans Affairs in the US

during November 2017

• Expected to be available in China from

Q2 2018

Strong launch KPIs – exceeding those of ReSound LiNX2

14

• ReSound LiNX 3D has consistently performed stronger than

ReSound LiNX2 globally

• Feedback focuses on superior speech in noise

• Users of ReSound LiNX 3D hear the sounds like an open ear

Strong sales uptake

continues

• Continued global ASP increase like-for-like

• Price point upselling compared to ReSound LiNX2

Positive ASP

development

• Continued increase in points-of-sales sign-up for ReSound Assist

since launch

• Studies show that 100% of HCPs and 89% of users would

recommend ReSound Assist

ReSound Assist

very well-received by

HCPs and users

15

Strong sales uptake continues

Example 1: US Commercial Example 2: United Kingdom Example 4: AustraliaExample 3: Germany

1

14

27

40

53

66

79

92

10

5

11

8

13

1

14

4

15

7

17

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18

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19

6

20

9

22

2

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24

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26

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27

4

28

7

30

0

31

3

32

6

33

9

Days since launch

1

14

27

40

53

66

79

92

10

5

11

8

13

1

14

4

15

7

17

0

18

3

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6

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9

22

2

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3

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6

33

9

Days since launch

1

14

27

40

53

66

79

92

10

5

11

8

13

1

14

4

15

7

17

0

18

3

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6

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9

22

2

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1

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28

7

30

0

31

3

32

6

33

9

Days since launch

1

14

27

40

53

66

79

92

10

5

11

8

13

1

14

4

15

7

17

0

18

3

19

6

20

9

22

2

23

5

24

8

26

1

27

4

28

7

30

0

31

3

32

6

33

9

Days since launch

Accumulated unit sales of ReSound LiNX² and Beltone Legend Accumulated unit sales of ReSound LiNX 3D and Beltone Trust

1 50 100 150 200 250 300 1 50 100 150 200 250 300 1 50 100 150 200 250 300 1 50 100 150 200 250 300

16

Remote fine-tuning is highly appreciated by hearing care professionals and users

What HCPs say What users say

• I would recommend using this service

to others

• It helps my client get a better hearing

experience

• It enables me to deliver the best fit

within a shorter time frame

• I would recommend using this service

to others89%

• It was easy to request assistance from

my HCP from the app

• The new settings received from my

HCP improved my hearing 77%

83%

100%

94%

87%

* Survey with 31 Hearing Care Practitioners in 11 countries who have used

ReSound Assist 10 or more times.* Survey with 70 ReSound Assist users in the U.S. and the Netherlands.

Revolutionary intelligent communication solution for defense and security forces

17

• GN FalCom is a fully fledged hearing protection

solution enabling defense and security forces to

hear more, do more and be more with unique

documented value propositions:

• Comfort

• Clarity

• Protection

• The new product is clearly differentiated and offers

a strong value proposition versus key competitors

in the field

• The state-of-the-art hearing protection solution

builds on GN’s unique expertise in sound

processing across GN Hearing and GN Audio

• This year, GN will participate in military tenders in

the US and with other NATO countries

Full MissionComfort | Clarity | Protection

Headset✓

Interface cable✓

Control box✓

Agenda

18

Group highlights 2017

GN Hearing update

GN Audio update

Financial outlook

GN Audio financial highlights 2017

19

During 2017, GN Audio further strengthened its world-

leading position

• 14% revenue growth with organic growth of 10%,

outperforming the updated 2017 guidance of “more than

7%”

• The continued strong growth reflects GN Audio’s

innovative world-leading product portfolio and strong

commercial execution in all regions

• Gross profit increased by 15% primarily driven by

product mix

• EBITA increased by 21% with a 1.1%pts EBITA margin

increase reflecting the strong revenue growth and the

product mix

• Strict focus on cash conversion continued with a strong

cash conversion of 67% for the year

* Reported EBITA (rolling four quarters) / avg. invested capital

DKK million FY 2017 FY 2016 Growth

Revenue 3,970 3,495 +14%

Organic growth 10% 7%

Gross profit 2,113 1,843 +15%

Gross margin 53.2% 52.7% +0.5%p

EBITA 721 597 +21%

EBITA margin 18.2% 17.1% +1.1%p

ROIC* 46% 41% +5%p

Free cash flow excl. M&A 481 523 (8)%

20

Strong organic growth in CC&O continues

Leading technology and commercial excellence drives growth across geographies

GN Audio’s professional business continues its strong momentum

Europe

Very strong double-digit organic

growth in 2017 driven by a broad

portfolio of countries

North America

Solid double-digit organic growth in

2017 on a tough comparison base

Rest of World

Very strong double-digit growth

continued in 2017 across several

countries

Changing work environments call for product innovations

21

21

of knowledge workers

work in open-plan offices

DEVELOPMENT IN M2 PER EMPLOYEE OFFICE SPACE

1960:

50 m2

2010:

20 m2

2020:

10 m2

state that interruptions in the office have a

negative impact on their productivity78%34%

During 2017 GN Audio expanded its world-leading CC&O product portfolio

22

Jabra Speak 710Jabra Evolve 75 Jabra Evolve 75e

Innovative world-leading product portfolio drives strong momentum in GN Audio’s CC&O business:

• The Evolve series was introduced in 2014 and has been a significant success across regions and channels

• Since its launch in late 2010, Jabra Speak has been a game changer, not only for GN Audio, but for the entire

enterprise audio solution industry

• The three product introductions in 2017 – Jabra Evolve 75, Jabra Evolve 75e, Jabra Speak 710 – have all been

very well received by the market and are strengthening GN Audio’s industry-leading UC portfolio

23

Building on GN Audio’s strong product portfolio in 2018

24

Jabra Elite 65t Jabra Elite Active 65t

At the CES conference in Las Vegas in January, GN Audio kicked off the new year with three important launches in the Elite

franchise of products:

• Elite 45e is the best combined voice and music experience in a headset with a discreet design and a great fit. The

unique box microphone solution delivers the clearest voice communication on any stereo wireless headphone

• Elite 65t is a true wireless earbud aimed at those who want the best voice and music experience without wires. It

ensures a stable wireless connection and best call and voice quality and has up to 15 hours of battery life

• Elite Active 65t is for those who want the features of the Elite 65t, while being able to use the earbuds in a sports or

training setting. The earbuds have enhanced grip, integrated accelerometer and IP56 sweat, water and dust certification

Jabra Elite 45e

Agenda

25

Group highlights 2017

GN Hearing update

GN Audio update

Financial outlook

Financial guidance for 2018

26

• GN Hearing expects continued profitable revenue growth in 2018, in line with the 2017 – 2019 strategy

• Organic growth is expected to be more than 6%. The EBITA margin is expected to be more than 20%. GN Hearing will continue

to invest in future growth opportunities, as described in the strategy for 2017 – 2019

• GN Audio expects continued profitable revenue growth in 2018, in line with the 2017 – 2019 strategy

• Organic growth is expected to be more than 7%. The EBITA margin is expected to be more than 17%, and GN Audio expects

continued operational leverage and improved product mix, however partly offset by investments in future growth opportunities

Organic revenue growth

GN Hearing GN Audio

> 6%

EBITA margin

Effective tax rate1

> 7%

> 20% > 17%

~ 22%

Note 1: GN Store Nord

Financial guidance 2018

• EBITA in Other is expected to be around DKK (135) million. The costs are related to Group Functions, including continued

investments in new business opportunities and research projects on a corporate level. The intelligent communication solution for

defense and security forces announced in January 2018 is an example of the portfolio of GN’s research projects

• GN expects an effective tax rate around 22%

• GN Store Nord targets a double-digit percent increase in earnings per share (EPS)

Save the date – AAA 2018

27

Investor and analyst meeting

AAA 2018

Nashville, Tennessee

1.00 pm (local time), April 18, 2018

28

Q&Awww.gn.com

E-mail: investor@gn.com

Peter Justesen, VP, IR & Treasury, Tel.: +45 4575 8716

Rune Sandager, Senior IR Manager, Tel.: +45 4575 9257

29

Appendix

GN Hearing’s strategic focus areas 2017 – 2019

Innovation excellence focusing on

end user needs, core technology and

time to market optimization

Commercial excellence through

expansion in the open market,

continuation of successful partnerships

and engaging end users digitally

People excellence by empowering

leaders to deliver on strategy,

implement GN values and develop

talents

Hear more,

Do more,

Be more

Innovation

excellence

Commercial

excellence

People

excellence

30

People

excellence

Commercial

excellence

Innovation

excellence

GN Audio’s strategic focus areas 2017 – 2019

31

Hear More, Do More, Be More

• Accelerate the call-centric category

• Expand Unified Communication (UC) strength for office

• Grow share in focus markets

• Cloud & digital first

• Grow consumer profitably

Strong profitable growth to continue in coming years

32

Revenue development (DKKm)1

EBITA development (DKKm)1

2011

5,174

8,651

20192016

+6-8% +6-9%

Financial targets 2017 - 2019

CAGR:

+11% CAGR:

+11%

CAGR:+11%

2011

6432

1,583

20192016

CAGR:+20%

Margin:

20-22%

Margin:

17-19%

Financial targets 2017 - 2019

Note 1: Excl. income received from the legal dispute with Telekomunikacja Polska (TPSA) Note 2: All numbers excluding Otometrics

GN Store Nord – five-year performance

33

DKK million 2013 2014 2015 2016 2017

GN Store Nord

Revenue 6,248 6,763 7,755 8,651 9,585

Organic growth 13% 9% 6% 6% 8%

Gross margin* 60.3% 62.4% 61.2% 62.4% 62.7%

EBITA* 1,217 1,196 1,383 1,583 1,744

EBITA margin* 19.5% 17.7% 17.8% 18.3% 18.2%

EBITA reported 1,113 1,196 1,383 1,583 1,744

Operating profit reported 1,050 1,132 1,149 1,445 1,558

Financial items (81) (80) (138) (52) (60)

Profit before tax reported 968 1,057 1,016 1,395 1,504

Effective tax rate 28% 29% 26% 22% 25%

Profit for the year reported 695 749 747 1,086 1,122

ROIC (EBITA/Invested capital) 20% 19% 20% 20% 20%

Free cash flow excl. M&A 96 561 607 1,179 1,134

Cash conversion** 9% 47% 44% 74% 65%* Excl. SMART restructuring costs ** Free cash flow excluding M&A / reported EBITA

GN Hearing – five-year performance

34

DKK million 2013 2014 2015 2016 2017

GN Hearing

Revenue 3,636 3,892 4,526 5,156 5,615

Organic growth 10% 8% 9% 6% 6%

Gross margin* 65.8% 68.8% 67.4% 69.0% 69.4%

EBITA* 775 833 921 1,062 1,153

EBITA margin* 21.3% 21.4% 20.3% 20.6% 20.5%

EBITA reported 671 833 921 1,062 1,153

ROIC (EBITA/Invested capital) 14% 16% 16% 17% 17%

Free cash flow excl. M&A 50 368 456 704 866

Cash conversion** 7% 44% 50% 66% 75%

* Excl. SMART restructuring costs ** Free cash flow excluding M&A / reported EBITA

GN Audio – five-year performance

35

DKK million 2013 2014 2015 2016 2017

GN Audio

Revenue 2,612 2,871 3,229 3,495 3,970

Organic growth 18% 11% 2% 7% 10%

Gross margin 52.7% 53.6% 52.6% 52.7% 53.2%

EBITA 472 521 540 597 721

EBITA margin 18.1% 18.1% 16.7% 17.1% 18.2%

EBITA reported 472 521 540 597 721

ROIC (EBITA/Invested capital) 65% 57% 47% 41% 46%

Free cash flow excl. M&A 178 340 271 523 481

Cash conversion* 38% 65% 50% 88% 67%

* Free cash flow excluding M&A / reported EBITA

36

Remote fine-tuning is highly appreciated by HCPs

Willingness to recommend the service

I would recommend using this service to others

Offer a better service and take better care of patients (Almost the entirety of HCPs)

ReSound Assist enables me to deliver the best fit within a shorter time frame

ReSound Assist helps me understand my client’s sound experience outside the clinic

Client feels more involved in the fitting experience with ReSound Assist than without

Improve the hearing experience and sound quality

ReSound Assist helps my client get a better hearing experience

ReSound Assist helps me provide a better sound quality for my client

Do more business

ReSound Assist reduces the amount of in-office appointments

Agree +

Fully Agree

94%

81%

90%

94%

87%

81%

100%

0% 20% 40% 60% 80% 100%

Source: Survey with 31 Hearing Care Practitioners in 11 countries who have used

ReSound Assist 10 or more times.

37

Remote fine-tuning is highly appreciated by users

1. It was easy to request assistance from my hearing care professional

2. Requested assistance in a sound environment where I needed help

3. It was easy to apply the new settings I received in the app

4. The new settings improved my hearing experience

5. This service saved me a trip to my hearing care professional

6. Likely to recommend this service to others

83%

66%

89%

77%

86%

89%

Source: Survey with 70 ReSound Assist users in the U.S. and the Netherlands.

Share price development (5 years)

Financial calendar

GN Store Nord share overview

38

Share information

• GN has a share capital of DKK 582,736,856, which is consisting

of 145,684,214 shares, each carrying four votes. GN has one

share class, and there are no restrictions on ownership or

voting rights

• GN is, among others, included in the C25 and Large Cap

indexes on Nasdaq Copenhagen as well as the Stoxx Europe

600 index

• Ticker symbols: GN:DC (Bloomberg) and GN.CO (Reuters)

• Number of registered shareholders: Around 25,000 (2017)

• Treasury shares: 9,241,315. 6.3% of share capital (2017)

• Market cap: DKK 27.4 billion (2017)

• Largest shareholders:

• T. Rowe Price Associates Inc. (>5%)

• Marathon Asset Management LLP (>5%)

• APG Asset Management N.V. (>5%)

• NN Group N.V. (>5%)

Date Event

March 13, 2018 Annual general meeting

May 2, 2018 Interim Report Q1 2018

August 22, 2018 Interim Report Q2 2018

November 15, 2018 Interim Report Q3 2018

90

140

190

240

290

28-12-2012 28-12-2013 28-12-2014 28-12-2015 28-12-2016 28-12-2017

GN C20 CAP Stoxx 600

Index: 01-11-2012 = 100

Dec 2012 Dec 2013 Dec 2014 Dec 2015 Dec 2016 Dec 2017