Annual Report 2018 – Roadshow presentation, February, 2019

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 2018

GN Hearing update

GN Audio update

Financial outlook

2017 2018

2017 2018

2017 2018

2017 2018

2017 2018

Delivering on promises

GN Hearing

• Strong organic growth of 7% – delivered on

guidance

• EBITA increased to DKK 1,194 million. EBITA margin

of 20.5% – delivered on guidance

GN Audio

• Very strong organic growth of 21% – delivered on

guidance

• EBITA increased to DKK 905 million. EBITA margin of

19.0% – delivered on guidance

GN Store Nord

• Effective tax rate of 22% – delivered on guidance

1) Including “Other”

GN Hearing revenue (DKKm) GN Hearing EBITA margin

Organic

growth

GN Store Nord effective tax rate (%)1)

5,8335,615

GN Audio EBITA margin

18.2%19.0%

3,970

4,774

GN Audio revenue (DKKm)

Organic

growth

22%25%

+0.8%p+21%

(3)%p

20.5% 20.5%+7%

0.0%p

4

Group financial highlights 2018

5

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

Double digit organic growth drives strong EBITA

growth and 15% EPS growth

• Organic growth was 13%. Revenue growth was 11%

including an impact of around (3)% from FX and 1%

from M&A

• Continued solid gross profit increase driven by strong

business performance

• EBITA increased by 12%, driven by strong execution

across GN Hearing and GN Audio

• Net profit reached DKK 1,247 million, a 11% increase

compared to 2017

• EPS growth of 15%

• 3 percentage point increase in ROIC, driven by

increased earnings level as well as strict focus on

balance sheet during the last years

DKK million FY 2018 FY 2017 Growth

Revenue 10,607 9,585 +11%

Organic growth 13% 8%

Gross profit 6,574 6,008 +9%

Gross margin 62.0% 62.7% (0.7)%p

EBITA 1,956 1,744 +12%

EBITA margin 18.4% 18.2% +0.2%p

Profit before tax 1,606 1,504 +7%

Net profit 1,247 1,122 +11%

EPS 9.25 8.07 +15%

ROIC* 24% 21% +3%p

Free cash flow excl. M&A 1,110 1,134 (2)%

Cash conversion 57% 65% (8)%p

NIBD/EBITDA 1.5x 1.6x

GN’s strong focus on cash conversion continues

• GN Hearing’s free cash flow excl. M&A in 2018

reflects the launch of ReSound LiNX Quattro

impacting trade receivables and inventories

• Continued very strong free cash flow excl. M&A in

GN Audio

• Continued strong group cash conversion of 57% in

2018

• Focused and prudent management of net working

capital continues

• 3 year average cash conversion of 65%

Continued strong cash generation

6

Free cash flow excl. M&A (DKK million)

Cash conversion (FCF ex. M&A / reported EBITA)

GN Hearing GN Audio GN Store Nord

GN Hearing GN Audio GN Store Nord

866

574

FY 17 FY 18

-34%

481

798

FY 17 FY 18

66%1,134 1,110

FY 17 FY 18

-2%

FY 17

75%

FY 18

48%

-27%p

FY 17

67%

FY 18

88%

+21%p

FY 17 FY 18

65%57%

-8%p

8941,198 1,364 1,443

1,168

0

1,000

2,000

2014 2015 2016 2017 2018

Dividends Share buyback

Creating shareholder value through efficient capital structure

7

Shareholder distributionDKKm

NIBD / EBITDA developmentDKKm

• During 2018, GN has distributed DKK 1.2

billion to shareholders

• DKK 182 million dividend was paid out in

March 2018 (DKK 1.25 per share)

• DKK 986 million share buybacks

• End 2018, the net interest bearing debt was

1.5x EBITDA

• Annual General Meeting on March 21, 2019:

• GN will propose a dividend of DKK 1.35 per

share in respect of the fiscal year 2018, total

DKK 197 million

• New DKK 1 billion SBB program planned, to

be concluded no later than the AGM 2020 1,6312,212

3,377 3,035 3,234

1.1x 1.4x 1.9x 1.6x 1.5x0x

1x

2x

3x

4x

0

2,000

4,000

2014 2015 2016 2017 2018

NIBD NIBD/EBITDA

Earnings per share

4.61 4.79

7.348.07

9.25

4.0

6.0

8.0

2014 2015 2016 2017 2018

DKK

Diversified funding profile provides flexibility and de-risks balance sheet

2.0

0.1 0.1

0.6

1.7

0.7

2021

0.70.1

2018 20222019 2020 2023 2024 2025

~5.3*

2.4Total debt

NIB

RCF

EIB

CB

* Note: Total debt of DKK 3.9bn plus undrawn RCF of DKK 1.4bn

8

• Euro Commercial Paper Program of

up to EUR 250 million launched in

January 2019. Attractive margin with

new short-term, uncommitted, unsecured

financing source

• Diversified funding profile with mid-

term maturity that provides flexibility

based on very strong cash-generative

business

• Sufficient flexibility to absorb

acquisition of Altia Systems as well as

the ongoing share buyback programs

Maturity profile (DKKbn)

IFRS changes are insignificant

9

DKK million 2018

reported

IFRS 16

impact

2018 incl. IFRS 16

impact

EBITDA 2,148 +125 2,273

EBITA 1,956 +3 1,959

Financial items (203) (10) (213)

Profit before tax 1,606 (7) 1,599

Profit & loss impact

Balance sheet impact

Financial ratios impact

• IFRS 9 (Financial instruments) and IFRS 15 (Revenue

from Contracts with Customers) have been

implemented as of January 1, 2018

• IFRS 9 – review of the Group’s financial assets and

liabilities resulted in a minor impact on recognition and

measurement (DKK +16 million in total assets)

• IFRS 15 – new standard already in line with previous

practice, resulting in no changes

• IFRS 16 (Leases) will be implemented from January 1,

2019

• The effects are based on lease agreements as of

December 31, 2018 and are subject to uncertainties

• The table to the right shows estimated impacts on 2018

numbers

• Overall limited impact on financials for GN

DKK million 2018

reported

IFRS 16

impact

2018 incl. IFRS 16

impact

Invested capital 8,467 +475 8,942

NIBD 3,234 +475 3,709

2018

reported

IFRS 16

impact

2018 incl. IFRS 16

impact

NIBD/EBITDA 1.5x +0.1x 1.6x

ROIC 24% (2)%pts 22%

IFRS 16 estimated impact

Jakob Gudbrand – new CEO of GN Hearing

10

• Born: 1971

• Nationality: Danish

• Education: Bachelor’s degree in chemical engineering from the

Technical University of Denmark

• Professional experience:

• Thermo Fisher Scientific, Chromatography and Mass

Spectrometry, President (2016 – 2018)

• Thermo Fisher Scientific, Vice President and General

Manager (2011 – 2015)

• Thermo Fisher Scientific, Integration, Vice President (2010 –

2011)

• GN positions:

• CEO, GN Hearing and member of GN Store Nord’s

Executive Management

Agenda

11

Group highlights 2018

GN Hearing update

GN Audio update

Financial outlook

GN Hearing financial highlights 2018

Continued strong growth driven by ReSound LiNX 3D

and newly launched ReSound LiNX Quattro

• Organic growth of 7%, with 10% in Q4 2018. Revenue

growth of 4%, including impact of around (3)% from FX

and around 1% from M&A

• Gross margin in line with 2017

• The EBITA margin reached 20.5%, in line with 2017

and financial guidance, reflecting strong underlying

performance, but off-set with FX and ongoing

investments in future growth opportunities

• ROIC increased to 19% compared to 18% in 2017

• Cash conversion of 48%, with the successful launch of

ReSound LiNX Quattro impacting trade receivables

and inventories

• Strong momentum continues into 2019

12

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

DKK million FY 2018 FY 2017 Growth

Revenue 5,833 5,615 +4%

Organic growth 7% 6%

Gross profit 4,034 3,895 +4%

Gross margin 69.2% 69.4% (0.2)%p

EBITA 1,194 1,153 +4%

EBITA margin 20.5% 20.5% -

ROIC* 19% 18% +1%p

Free cash flow excl. M&A 574 866 (34)%

Cash conversion 48% 75% (27)%p

13

The strong organic growth of 7% was driven across regions and countries

Leading technology and commercial excellence driving growth in 2018

GN Hearing has taken market shares 8 years in a row

Europe

Solid growth in Europe with

particularly strong performance in

France

North America

Double digit organic growth with

independents. Strong pick-up in

VA. Growth in Beltone below group

growth rate

Rest of World

Continued double digit organic

growth with China as the main

driver

ReSound LiNX Quattro roll-out

practically completed

• ReSound LiNX Quattro, and corresponding

Beltone Amaze, first shipped on August 31,

following announcement on August 13

• Global roll-out practically completed

• Available in almost 50 countries world-

wide (incl. US, UK, Germany, France,

Spain, Italy, Japan and Australia)

• Strong customer feedback focusing on

superior sound quality and a state-of-the-

art rechargeable solution

• Available in VA from November 1, 2018

14

ReSound LiNX Quattro –

New chip platform enables significant upgrades

• Brilliant sound experience with

unprecedented Layers of Sound™

• The world’s most advanced

rechargeable solution

30%More

Computing

Power

New chip,

with 6th gen

2.4 GHz tech

100%Increased

memory

25%Reduced power

consumption

100%Increased

speed

15

Strong initial

performance

• Continued strong demand for ReSound LiNX

Quattro – with less cannibalizations than seen

in earlier product launches

• Feedback continues to focus on superior

sound quality and state-of-the-art

rechargeable solution

• The positive trend continues into 2019

Positive ASP

development

• Strong global ASP increase like-for-like vs

ReSound LiNX 3D

• Customers willing to pay for superior technology

• Continued price point upselling with better mix

compared to earlier

LiNX2 LiNX 3D LiNX Quattro

Monthly development

Successful introduction of ReSound LiNX Quattro continuous

Strong ASP increase

like-for-like

16

ASP

Canibalization in the past Less canibalization

17

GN’s AI technology will allow hearing aid users to forget that they are wearing one

Personalized noise management

• Crowd-source data sharing for predictive noise reduction

Personalized user (patient) management

• Precision fitting to define best first fit for user

• Remote fine-tuning and learning to support in-situ adaptation in real-world environments

Intelligent Agent for Situated Learning (IASL)

Intelligent Agent for Big Data Learning (IABDL)

GN Hearing launches the world’s first hearing solutions that employ AI: “Just swipe” and “Just talk”

Agenda

18

Group highlights 2018

GN Hearing update

GN Audio update

Financial outlook

GN Audio financial highlights 2018

19

GN Audio delivered 21% organic growth in 2018, driven by

exceptionally strong performance in both the CC&O

business and the consumer business

• Organic growth of 21%, with 28% in Q4 2018. Revenue

growth of 20%, including impact of around (2)% from FX

and around 1% from M&A

• Strong performance across CC&O and consumer

• Gross margin in line with 2017

• EBITA increased 26% reflecting strong revenue growth

and operational leverage. EBITA margin of 19.0%

compared to 18.2% in 2017

• Significant increase in ROIC from 46% in 2017 to 59% in

2018

• Cash conversion of 88% for 2018 driven by strict focus

on balance sheet items

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

DKK million FY 2018 FY 2017 Growth

Revenue 4,774 3,970 +20%

Organic growth 21% 10%

Gross profit 2,540 2,113 +20%

Gross margin 53.2% 53.2% -

EBITA 905 721 +26%

EBITA margin 19.0% 18.2% +0.8%p

ROIC* 59% 46% +13%p

Free cash flow excl. M&A 798 481 +66%

Cash conversion 88% 67% +21%p

20

Strong and broad based organic growth in CC&O continues

Leading technology and commercial excellence drives growth across geographies in 2018

GN Audio’s professional business continues its strong momentum.The positive trend continues in 2019

Europe

Strong organic growth driven by a

portfolio of countries and a strong

public sector performance. Fastest

growing region in 2018

North America

Solid organic growth driven by GN

Audio’s strong professional

product portfolio

Rest of World

Strong organic growth across

several countries incl. India and

ANZ

GN Audio to acquire Altia Systems

21

• The acquisition, announced on 19 February, allows GN

Audio to expand into integrated audio and video UC

communication, offering solutions that increase

companies’ productivity and allow companies to

work smarter

• The acquisition gives GN Audio immediate access to

the highly attractive market of integrated audio and

video solutions for small collaboration rooms – so-called

huddle rooms

• The total purchase consideration is up to USD 125

million on a debt and cash free basis. As part hereof

around USD 12 million is linked to retention agreements

to be expensed by GN Audio during 2019-2021.

Transaction related costs of up to USD 7 million

• The acquisition will not have a material impact on GN

Store Nord or GN Audio’s underlying financials in

2019 – accretive to financials from 2020

• Founded in 2011

• Headquartered in Cupertino, California, USA

• Leading innovative developer of premium video communication solutions

PanaCast 2 PanaCast 3 (to come)

Strong strategic fit between GN Audio and Altia Systems

22

Altia Systems

delivers• World leading and most technically advanced multi-camera array video solution

GN Audio delivers

• Global audio technology leadership

• Sales & Marketing scale, Channel and End Customer reach and Product

Industrialization skills

Together we deliver• The most technically advanced intelligent full video and audio collaboration

solutions

Highly skilled R&D

resources

• Highly skilled and motivated to solve difficult challenges within audio and video

collaboration solutions

Strong presence in

Silicon Valley

• Silicon Valley can be used strategically to create a strong presence in the tech

environment as well as attract best-in-class talent

Cultural fit• Talented people, professional attitude and result driven wanting to Listen, Challenge and

Transform

Altia Systems is strongly positioned in highly attractive huddle room segment

23

Small room size,

low complexity

+$2,000

solutions

Up to

$1,300

Video conferencing market overview

Small / mid room size,

low complexity

Mid / large room size,

high complexity

Embedded

Embedded Systems

Growth: NA

Traditional VC Systems

Growth1: ~0%

Huddle Conference Cams

Growth1: ~35%

• Total video conferencing market worth USD

>2 billion1

• Huddle room video conferencing market

expected to grow >30% p.a.1

− Video conferencing to become a

significantly larger share of total online

conferences (today only 2% of huddle

conference rooms include video

conferencing)

− Increasing number of huddle rooms driven

by high growth in open offices, remote

work and team based collaboration

− Huddle room video conferencing

characterized by plug-and-play solutions

integrating into well established UC

solutions

− ~75% of conference rooms are used for

meetings with three to five people

1 Frost & Sullivan (2018)

24

GN Audio is strongly positioned in a very attractive portfolio of markets

Call-centric

Enterprise (~80% of revenue) Consumer (~20% of revenue)

Task-based BT stereo* (incl. sports)

“Calls for a living“

(e.g., contact centers, customer

service, traders)

Office-based

knowledge workersPreference for great calls, music

and an active lifestyle

#2Small in fragmented

market#1

Segment

Characteristics

Market development

Relative

market size

(indicative) and market

share (indicative)

Market position

Total relevant market of > DKK 40bn growing at close to 10% per year

Primary product

offering

Jabra EngageJabra Evolve

Jabra Speak

PanaCast

Jabra Elite

* Jabra Elite now accounts for the majority of the consumer business

”True wireless”

#3

Powered by

Sound+

Calls & Music

like never before including

Active Noise Cancellation

and superior battery life

SmartSound. Audio that adapts

automatically to surroundings

based on Artificial Intelligence

Engineered for the best wireless calls and music

experience with SmartSound

Introducing Jabra Elite 85h

100% Hands-free

Voice Assitant Control

Repositioning of the consumer business driven by relentless customer focus

26

Solemate Revo

SportVox

Style

Stealth Motion

Solemate Max

Elite 65hElite Sport

Elite 65t Active

Elite 65tElite 85h

• Specialized segment: Music and calls

• High exposure to decreasing mono BT market

• Competing head-to-head with superior brands

• Limited R&D synergies with CC&O business

• Focus on technology leadership within sound

processing, wireless capabilities and AI

• High exposure to growing markets

• Leverage R&D synergies across GN Audio

2016 – 2019 product launches2012 – 2015 product launches

Agenda

27

Group highlights 2018

GN Hearing update

GN Audio update

Financial outlook

22%25%

22%~23%

2016 2017 2018 2019

Financial guidance for 2019

GN Hearing

• Organic growth is expected to be around 7%

• 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

• Organic growth is expected to be more than 15% with

particularly strong growth in the first half of 2019, reflecting

comparison base

• The EBITA margin is expected to be more than 19%

before extraordinary one-off costs related to the Altia

acquisition. GN Audio expects continued operational

leverage, however partly offset by continued investments

in future growth opportunities

GN Store Nord

• EBITA in Other expected to be DKK (150) million related

to Group Functions, continued investments in new

business opportunities and research projects on a

corporate level

• GN expects an effective tax rate around 23%

• GN Store Nord targets a double digit percent increase

in earnings per share (EPS)1) Including “Other”

GN Hearing revenue (DKKm) GN Hearing EBITA margin

GN Store Nord tax rate (%)1)

GN Audio EBITA marginGN Audio revenue (DKKm)

0.0%p

US tax reform net of related items (3.1%pts)

(0.1)%p

+0.8%p

7%6%

21%10%

(3)%p+3%p

Organic growth ~7%

Organic growth >15%

28

5,156 5,615 5,833

2016 2017 2018 2019

20.6% 20.5% 20.5% >20%

2016 2017 2018 2019

3,495 3,9704,774

2016 2017 2018 2019

17.1%18.2% 19.0% >19%

2016 2017 2018 2019

GN Store Nord EPS1)

7.348.07

9.25

2016 2017 2018 2019

+1.1%p

+10% +15% >10%

Save the date – AAA 2019

29

Investor and analyst meeting

AAA 2019

Columbus, Ohio

9.30 am (local time), March 28, 2019

30

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

31

Appendix

GN Hearing’s strategic focus areas 2017 – 2019

Innovation excellence focusing on

user needs, core technology and time

to market optimization

Commercial excellence through

expansion in the open market,

continuation of successful partnerships

and engaging 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

32

People

excellence

Commercial

excellence

Innovation

excellence

GN Audio’s strategic focus areas 2017 – 2019

33

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

34

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

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

GN Store Nord – five-year performance

35

* Free cash flow excluding M&A / reported EBITA

DKK million 2014 2015 2016 2017 2018

GN Store Nord

Revenue 6,763 7,755 8,651 9,585 10,607

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

Gross margin 62.4% 61.2% 62.4% 62.7% 62.0%

EBITA 1,196 1,383 1,583 1,744 1,956

EBITA margin 17.7% 17.8% 18.3% 18.2% 18.4%

Operating profit 1,132 1,149 1,445 1,558 1,796

Financial items -80 -138 -52 -60 -203

Profit before tax 1,057 1,016 1,395 1,504 1,606

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

Net profit 749 747 1,086 1,122 1,247

ROIC (EBITA/Invested capital) 19% 20% 20% 21% 24%

Free cash flow excl. M&A 561 607 1,179 1,134 1,110

Cash conversion* 47% 44% 74% 65% 57%

EPS 4.61 4.79 7.34 8.07 9.25

GN Hearing – five-year performance

36

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

DKK million 2014 2015 2016 2017 2018

GN Hearing

Revenue 3,892 4,526 5,156 5,615 5,833

Organic growth 8% 9% 6% 6% 7%

Gross margin* 68.8% 67.4% 69.0% 69.4% 69.2%

EBITA* 833 921 1,062 1,153 1,194

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

ROIC (EBITA/Invested capital) 16% 16% 17% 18% 19%

Free cash flow excl. M&A 368 456 704 866 574

Cash conversion** 44% 50% 66% 75% 48%

GN Audio – five-year performance

37

* Free cash flow excluding M&A / reported EBITA

DKK million 2014 2015 2016 2017 2018

GN Audio

Revenue 2,871 3,229 3,495 3,970 4,774

Organic growth 11% 2% 7% 10% 21%

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

EBITA 521 540 597 721 905

EBITA margin 18.1% 16.7% 17.1% 18.2% 19.0%

ROIC (EBITA/Invested capital) 57% 47% 41% 46% 59%

Free cash flow excl. M&A 340 271 523 481 798

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

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 (2018)

• Treasury shares: 13,107,872. 9.0% of share capital (2018)

• Market cap: DKK 32 billion (2018)

• Largest shareholders:

• APG Asset Management N.V. (>5%)

• NN Group N.V. (>5%)

• Marathon Asset Management (>5%)

Date Event

March 21, 2019 Annual general meeting

May 1, 2019 Q1 2019

August 22, 2019 Q2 2019

November 7, 2019 Q3 2019

Index: 30-12-2013 = 100

80

130

180

230

30-12-2013 30-12-2014 30-12-2015 30-12-2016 30-12-2017

GN C20 CAP Stoxx 600