Conference call presentation

November 15, 2018

Interim Report Q3 2018

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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 Q3 2018

GN Hearing update

GN Audio update

Financial outlook

Group financial highlights Q3 2018

4

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

Continued double digit organic growth drives strong

EBITA growth and double digit EPS growth

• Organic growth was 12%. Revenue growth was 12%

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

from M&A

• Continued solid gross profit increase driven by strong

business performance

• EBITA increased by 14%, driven by strong execution

across GN Hearing and GN Audio

• Net profit reached DKK 301 million, a 6% increase

compared to Q3 2017

• EPS growth of 10% in the quarter. 10% increase YTD

• Continued increase in ROIC, driven by increased

earnings level as well as strict focus on balance sheet

DKK million Q3 2018 Q3 2017 Growth

Revenue 2,560 2,282 +12%

Organic growth 12% 7%

Gross profit 1,587 1,421 +12%

Gross margin 62.0% 62.3% (0.3)%p

EBITA 462 406 +14%

EBITA margin 18.0% 17.8% +0.2%p

Profit before tax 386 364 +6%

Net profit 301 283 +6%

EPS 2.25 2.05 +10%

ROIC* 23% 21% +2%p

Free cash flow excl. M&A 349 356 (2)%

Cash conversion 76% 88% (12)%p

NIBD/EBITDA 1.6x 1.6x

GN’s strong focus on cash conversion continues

• GN Hearing’s free cash flow excl. M&A in Q3 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 76% in

Q3 2018. YTD cash conversion of 68%

• Focused and prudent management of net working

capital continues

Continued strong cash generation

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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

253

182

Q3 17 Q3 18

-28%

164

226

Q3 18Q3 17

38%356 349

Q3 17 Q3 18

-2%

Q3 17 Q3 18

98%

68%

-31%p

101%

Q3 18Q3 17

92%

+9%p

Q3 17

88%

Q3 18

76%

-12%p

Agenda

6

Group highlights Q3 2018

GN Hearing update

GN Audio update

Financial outlook

GN Hearing financial highlights Q3 2018

Continued strong growth in the independent market

and encouraging launch of ReSound LiNX Quattro

• Organic growth of 6%. Revenue growth of 5%,

including impact of around (2)% from FX and 1% from

M&A

• Gross margin increase of 1.2%pts reflecting among

other mix effects in the quarter

• The EBITA margin reached 19.3%, in line with Q3

2017, reflecting the strong gross margin increase, but

off-set by the development in foreign exchange rates

as well as some launch costs

• Cash conversion was 68%, with the launch of

ReSound LiNX Quattro impacting trade receivables

and inventories

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

DKK millionQ3 Q3

Growth2018 2017

Revenue 1,391 1,327 5%

Organic growth 6% 6%

Gross profit 968 908 7%

Gross margin 69.6% 68.4% +1.2%p

EBITA 269 257 5%

EBITA margin 19.3% 19.4% (0.1)%p

ROIC* 19% 18% +1%p

Free cash flow excl. M&A 182 253 (28)%

Cash conversion 68% 98% (31)%p

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Continued solid organic growth in Q3 2018

Leading technology and commercial excellence driving growth

GN Hearing continues to capture market shares

Europe

Solid growth in Europe with

particular strong performance in

France and Spain

North America

Double digit organic growth with

independents. Growth in VA

negatively impacted by

rechargeable category; ReSound

LiNX Quattro launched in Nov.

Rest of World

Continued double digit organic

growth with China as the main

driver

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

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10

Brilliant sound experience with

unprecedented Layers of Sound™

• ReSound LiNX Quattro™ has the highest

input dynamic range available

• Enhancing the ability of hearing aids to

process sound at all input levels in more

detail

• Softer sounds are clearer and loud sounds

fuller and distortion-free

• While the primary goal of hearing aids is to

hear and communicate with others, the hearing

aid’s ability to faithfully reproduce music is the

ultimate test of sound quality

Jespersen et al., 2018

ReSound LiNX Quattro™

Other premium hearing aids

ReSound LiNX Quattro™ is preferred for music

listening, compared to other premium hearing aids

95%

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The world’s most advanced

rechargeable solution

• ReSound LiNX Quattro™ is the smallest & longest

lasting 2.4 GHz integrated Li-ion rechargeable

hearing aid in the market – with a small and

exclusive portable charger, holding 3 extra charges

3 hours =

10 minutes =

30h

24h

CHARGING TIME BATTERY LIFE

With 50% of

streaming time

2.7h

Quick and long-lasting power – full confidence:

<30 secs

The most intuitive Li-ion rechargeable hearing aid in the market:

8 out of 10 users are able to set up and use the charger in less

than 30 seconds without instructions, which is twice as many as

for other rechargeable hearing aids

Groth, 2018

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 more than 35 countries world-

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

Spain, Italy, Japan and Australia)

• Faster roll-out than seen in recent product

launches

• Available in VA from November 1, 2018

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Strong unit

uptake

• Encouraging ReSound LiNX Quattro launch –

initial strong unit uptake compared to previous

product launches including ReSound LiNX 3D.

Limited Q3 2018 impact due to timing of launch

• Feedback focuses on superior sound quality

and a state-of-the-art rechargeable solution

• The positive trend continues in Q4 2018

Positive ASP

development

• Strong global ASP increase like-for-like vs

ReSound LiNX 3D

• Price point upselling with better mix compared

to earlier

• Customers have accepted the

Premium-Plus price points

Monthly revenue development

Encouraging launch of ReSound LiNX Quattro

Strong ASP increase

like-for-like

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ASP

Canibalization in the past Launch KPI

LiNX2 LiNX 3D

2017

“Adoption”

• Drive early adoption

with launch of

ReSound LiNX 3D in

April 2017

• Initial adoption focuses

on efficiency gains

GN Hearing continues to set the direction for remote

fine-tuning (RFT)

2018

“Education”

• Education of customers

and industry with

ReSound LiNX Quattro

• Focus on “care tool”:

users experience a

better hearing

experience due to

better fit and stronger

user empowerment

2019 –

“Leverage”

• Unique insights from

comprehensive cloud

data will be used in

product development

• User empowerment will

be an increasingly

important topic, among

other as part of expected

OTC regulation in the

US

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100% of HCPs using

remote fine tuning

recommend it*

100% 94%

94% of HCPs say it helps

them provide their clients with

a better hearing experience*

* Raun, 2018

Agenda

15

Group highlights Q3 2018

GN Hearing update

GN Audio update

Financial outlook

GN Audio financial highlights Q3 2018

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GN Audio delivered 20% organic growth in Q3 2018,

driven by exceptionally strong performance in both the

CC&O business and the consumer business

• Revenue growth was 22%, incl. impact of around 1%

from FX and around 1% from M&A

• Strong performance in CC&O, reflecting GN Audio’s

innovative world leading product portfolio as well as

strong commercial execution

• Strong performance in consumer, reflecting the ongoing

repositioning among other with strong performance by

the Elite family

• Gross margin decreased 0.7%pts compared to Q3 2017

driven by product mix

• EBITA increased 25% reflecting strong revenue growth

and operational leverage

• Cash conversion of 101%

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

DKK millionQ3 Q3

Growth2018 2017

Revenue 1,169 955 22%

Organic growth 20% 9%

Gross profit 619 513 21%

Gross margin 53.0% 53.7% (0.7)%p

EBITA 224 179 25%

EBITA margin 19.2% 18.7% +0.5%p

ROIC* 55% 50% +4%p

Free cash flow excl. M&A 226 164 38%

Cash conversion 101% 92% +9%p

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Strong and broad based 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

Strong organic growth in Q3 2018

driven by a broad portfolio of

countries incl. Germany and UK

North America

Solid organic growth driven by GN

Audio’s strong professional

product portfolio

Rest of World

Strong organic growth continued in

Q3 2018 across several countries

incl. Singapore and ANZ

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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 Engage Jabra Evolve

Jabra Speak

Jabra Elite

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

”True wireless”

#3

Comprehensive UC offering needed to target evolving use cases

ROAD WARRIOREXECUTIVE NOMADREMOTE WORKER FLEXIBLE “HUB” WORKERDESK WORKER CORRIDOR WARRIOR

Static workplace

High noise environment

High daily usage

High mobility requirement

Changing noise environements

Spontanious usage

New recent use cases

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Introducing Jabra Evolve 65t –

the world’s first certified true wireless earbud

Professional-grade sound. True wireless earbuds

All day power. Always connected

Blocks out disruptive background noise. On-the-go concentration

Customizable Equalizer. Your sound, the way you want to hear it

Third-generation technology. Trusted, reliable connection

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Engineered

for the extreme

Innovative

technology

meets extreme

action

Truly hear every

experience

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Agenda

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Group highlights Q3 2018

GN Hearing update

GN Audio update

Financial outlook

26%22%

25%~22%

2015 2016 2017 2018

Financial guidance for 2018 is confirmed

GN Hearing – Unchanged

• 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 – Unchanged

• Organic growth is expected to be between 16-19%

• The EBITA margin is expected to be more than 18%

GN Store Nord – Unchanged

• EBITA in Other expected to be DKK (135) 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 22%

• GN Store Nord targets a double digit percent increase

in earnings per share (EPS)

1) Excluding Otometrics 2) Including “Other”

Revenue (DKKm)1) EBITA margin

Tax rate (%)1)2)

EBITA marginRevenue (DKKm)

(0.1)%p

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

4,526 5,156 5,615

2015 2016 2017 2018

3,229 3,495 3,970

2015 2016 2017 2018

20.3% 20.6% 20.5% >20%

2015 2016 2017 2018

16.7% 17.1% 18.2% >18%

2015 2016 2017 2018

+0.3%p

+0.4%p +1.1%p

+6%+6%

+10%+7%

+3%p(4)%p

Organic growth >6%

Organic growth 16-19%

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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

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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

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People

excellence

Commercial

excellence

Innovation

excellence

GN Audio’s strategic focus areas 2017 – 2019

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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

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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

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

DKK million 2013 2014 2015 2016 2017 Q3 2018

GN Store Nord

Revenue 6,248 6,763 7,755 8,651 9,585 2,560

Organic growth 13% 9% 6% 6% 8% 12%

Gross margin* 60.3% 62.4% 61.2% 62.4% 62.7% 62.0%

EBITA* 1,217 1,196 1,383 1,583 1,744 462

EBITA margin* 19.5% 17.7% 17.8% 18.3% 18.2% 18.0%

EBITA reported 1,113 1,196 1,383 1,583 1,744 462

Operating profit reported 1,050 1,132 1,149 1,445 1,558 417

Financial items -81 -80 -138 -52 -60 -31

Profit before tax reported 968 1,057 1,016 1,395 1,504 386

Effective tax rate 28.0% 29.0% 26.0% 22.0% 25.0% 22.0%

Net profit 695 749 747 1,086 1,122 301

ROIC (EBITA/Invested capital) 20% 19% 20% 20% 20% 23%

Free cash flow excl. M&A 96 561 607 1,179 1,134 349

Cash conversion** 9% 47% 44% 74% 65% 76%

GN Hearing – five-year performance

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

DKK million 2013 2014 2015 2016 2017 Q3 2018

GN Hearing

Revenue 3,636 3,892 4,526 5,156 5,615 1,391

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

Gross margin* 65.8% 68.8% 67.4% 69.0% 69.4% 69.6%

EBITA* 775 833 921 1,062 1,153 269

EBITA margin* 21.3% 21.4% 20.3% 20.6% 20.5% 19.3%

EBITA reported 671 833 921 1,062 1,153 269

ROIC (EBITA/Invested capital) 14% 16% 16% 17% 17% 19%

Free cash flow excl. M&A 50 368 456 704 866 182

Cash conversion** 7% 44% 50% 66% 75% 68%

GN Audio – five-year performance

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* Free cash flow excluding M&A / reported EBITA

DKK million 2013 2014 2015 2016 2017 Q3 2018

GN Audio

Revenue 2,612 2,871 3,229 3,495 3,970 1,169

Organic growth 18% 11% 2% 7% 10% 20%

Gross margin 52.7% 53.6% 52.6% 52.7% 53.2% 53.0%

EBITA 472 521 540 597 721 224

EBITA margin 18.1% 18.1% 16.7% 17.1% 18.2% 19.2%

ROIC (EBITA/Invested capital) 65% 57% 47% 41% 46% 55%

Free cash flow excl. M&A 178 340 271 523 481 226

Cash conversion* 38% 65% 50% 88% 67% 101%

Share price development (5 years)

Financial calendar

GN Store Nord share overview

32

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 (Q3 2018)

• Treasury shares: 12,469,598. 8.6% of share capital (Q3 2018)

• Market cap: DKK 42 billion (Q3 2018)

• Largest shareholders:

• APG Asset Management N.V. (>5%)

• NN Group N.V. (>5%)

• Marathon Asset Management (>5%)

Date Event

February 27, 2019 Annual Report 2018

March 21, 2019 Annual genral meeting

May 1, 2019 Q1 2019

August 22, 2019 Q2 2019

November 7, 2019 Q3 2019

Index: 30-09-2013 = 100

90

140

190

240

290

30-09-2013 30-09-2014 30-09-2015 30-09-2016 30-09-2017

GN C20 CAP Stoxx 600