Q1 shows Strong improvement in EBITA - GN ReSound Increases EBITA outlook for 2010

In Q1, GN saw clear results of the comprehensive restructuring undertaken
during 2009, the attractive and upgraded product portfolio as well as the
targeted sales and marketing efforts initiated recently. EBITA in Q1 2010
improved by more than DKK 150 million compared to Q1 2009 and GN returned to
positive organic growth. 

GN ReSound is expected to deliver positive organic growth for 2010 based on the
successful launch of the Surround Sound by ReSound™ featured products ReSound
Live™ and dot2 by ReSound™ in late 2009 and the recent announcement of
ReSound Alera™. As a consequence hereof as well as a stronger USD, GN ReSound
increases the EBITA outlook for 2010 to DKK 300-350 million up from DKK 275-325
million guided in the Annual Report for 2009. On April 19, GN Netcom increased
its EBITA outlook for 2010, as a result of higher than expected growth
partially driven by accelerating adoption of Unified Communications (UC). GN
Netcom now expects an EBITA for 2010 of DKK 150-200 million, up from the
previous outlook of DKK 100-150 million provided in the Annual Report for 2009.
At GN Store Nord level the EBITA is hereby expected to improve from DKK 8
million in 2009 to DKK 425-525 million in 2010. 

After Q1, GN has made a number of GN ReSound related announcements. Firstly, on
April 15, we introduced ReSound Alera™ - a new groundbreaking advance in
wireless hearing aids. ReSound Alera™ is employing the superior Surround Sound
by ReSound™ technology. Secondly, on May 5, GN received the complete wording of
the ruling by the German Federal Supreme Court stating that the decision made
by the German Federal Cartel Office (Bundeskartellamt) on April 11, 2007
prohibiting the sale of GN ReSound to Sonova was an error. GN is considering
all legal opportunities in order to claim compensation for the significant loss
imposed on GN Store Nord. 

During Q1, GN Netcom launched the mono headset Jabra EXTREME, featuring Jabra
Noise Blackout™ Extreme and the clip-on headset Jabra CLIPPER which combines
the advantages of Bluetooth® wireless technology and corded headsets. 

Highlights
• Total revenue was DKK 1,174 million equivalent to 2% organic growth compared
to Q1 2009.
 
• Total EBITA was DKK 86 million - an improvement of DKK 151 million compared
to Q1 2009.
 
• GN Netcom revenue was DKK 446 million and EBITA was DKK 26 million. Organic
growth in Q1 was higher than expected at 9%. Excluding Mobile OEM, organic
growth was 21%.
 
• GN ReSound revenue was DKK 726 million and EBITA was DKK 70 million. Organic
growth in Q1 was in line with expectations at (2)%. 

• During Q1 net interest-bearing debt declined below the DKK 1 billion mark and
is now down to DKK 987 million, compared to DKK 1,522 million in Q1 2009. 

• The new CEO of GN ReSound Lars Viksmoen was announced on March 25 and started
on April 1. 

• On April 27, GN ReSound announced that the supply chain initiative is
expected to deliver up to DKK 200 million in cost reductions by 2011 and
thereby improving the EBITA margin by 6-7%-points at unchanged revenue level.
GN ReSound is thereby taking a significant step in the strategy intended to
move earnings to a competitive level. 

• During the summer, GN will announce its dividend and share buy-back policy,
including the timing of a potential share buy-back program. 

• During the fall, GN will define and communicate its long-term financial
targets. 

• In the DPTG/TPSA arbitration proceedings, GN is awaiting a decision from the
Arbitration Tribunal on DPTG's claim for phase 1 (1994 to mid-2004). The
Arbitration Tribunal has informed us that it is still conducting intense
deliberations on the award for phase 1. A further deliberation among the
arbitrators is scheduled for the second half of June 2010. 

 “I am encouraged to see how our strong product portfolio combined with our
completed restructuring initiatives from 2009 and our ongoing transformation of
the supply chain is starting to have an impact on our results,” says CEO of GN
ReSound Lars Viksmoen. 

“We are now seeing how the combination of our successful restructuring program,
the new groundbreaking products both in the CC&O segment and in the Mobile
segment and the focused sales execution is boosting our earnings. Especially in
the very important Unified Communications area we are seeing very strong
developments,” says CEO of GN Netcom Mogens Elsberg.