Annual Report 2009 - Strong Cash Flow and Encouraging Development in EBITA from Ongoing Operations

Despite very difficult market conditions in 2009, GN has delivered on the goals
set out at the beginning of the year - improve cash flows and earnings through
comprehensive restructuring programs. 

GN's Q4 revenue was consistent with the updated full-year guidance of "around
DKK 4.7 billion" provided in the Q3 Interim Report on November 11, 2009. 

In Q4 2009, the restructuring programs resulted in significant improvements in
recurring profitability. Excluding a DKK 85 million one-time provision related
to legacy issues, GN's Q4 EBITA was DKK 111 million (Q4 2008 DKK 27 million).
EBITA for the full year was DKK 93 million (excluding the one-time provision)
and thus ahead of the original guidance of “around DKK 65 million” provided in
the Annual Report for 2008 on February 27, 2009. 

GN continued to generate positive free cash flow in Q4 - DKK 100 million - and
consequently the free cash flow for 2009 comfortably exceeded the updated and
increased guidance of "around DKK 0.5 billion" provided in the Q3 Interim
Report on November 11, 2009. 

Chairman of the Supervisory Board Per Wold-Olsen says: “I am pleased to
conclude that we have delivered as promised. Despite significantly lower
revenue in 2009 compared to 2008, GN's cash flow improved significantly, EBITA
from ongoing operations showed positive development and we managed to reduce
our net interest-bearing debt considerably during the year. Following the
comprehensive restructuring programs implemented during 2009, we expect EBITA
to increase considerably in 2010.” 

Q4 2009 Results

• Total GN revenue was DKK 1,227 million corresponding to organic growth of
(10)%. 
• EBITA was DKK 111 million (excluding the DKK 85 million one-time provision
related to legacy issues) compared to DKK 27 million in Q4 2008. 
• As announced on February 11, 2010, GN Netcom has identified certain
legacy-related issues and has accordingly decided to make a DKK 85 million
provision for defense and potential settlement costs. One of the issues
identified is related to possible fraudulent actions committed by an employee. 
• The free cash flow was DKK 100 million versus DKK 35 million in Q4 2008.
• Revenue in GN Netcom was DKK 468 million equivalent to (19)% organic growth.
• GN Netcom's EBITA was DKK 78 million or DKK (48) million inclusive of
non-recurring costs related to the FAST turnaround-program (DKK 41 million) and
the one-time provision related to legacy issues. The Mobile Division achieved
EBITA break-even in Q4 2009, for the first time in four years. 
• Revenue in GN ReSound was DKK 757 million equal to organic growth of (3)%.
• GN ReSound's EBITA was DKK 87 million (of which Audiologic Diagnostics
Equipment contributed DKK 9 million) compared to DKK 56 million in Q4 2008. 

Full-year 2009 Results

• Total GN revenue was DKK 4,729 million corresponding to organic growth of
(16)%. GN Netcom (organic growth of (30)%) maintained its market shares while
GN ReSound (organic growth of (6)%) lost market shares. 
• EBITA was DKK 8 million, including non-recurring costs of DKK 143 million
related to the FAST turnaround-program and the DKK 85 million one-time
provision. 
• Earnings before tax amounted to DKK (1) million against DKK (83) million in
2008. 
• Net interest-bearing debt was DKK 1,029 million against DKK 1,592 million at
December 31, 2008. 
	
Additional Highlights

• In the DPTG/TPSA arbitration proceedings, we anticipated a decision from the
Arbitration Tribunal on DPTG's claim for the period 1994 to mid-2004 before
year-end 2009. The Arbitration Tribunal has not yet rendered its decision. 
• In the appeal case regarding the prohibition of the sale of GN ReSound to
Sonova, a hearing took place on December 15, 2009. The German Federal Supreme
Court will issue a ruling on April 20, 2010. 
• GN has decided to appeal the tax case regarding the impairment write-down of
Beltone goodwill. 
• The Supervisory Board will propose to the general meeting that no dividend be
paid for 2009. 

Outlook for 2010

Following the comprehensive restructuring programs implemented in both GN
Netcom and GN ReSound during 2009, EBITA is expected to improve from DKK 8
million in 2009 to DKK 350-450 million in 2010 and revenue is expected to show
modest organic growth. 

EBITA

• GN Netcom	 DKK 100-150 million
• GN ReSound	 DKK 275-325 million
• Other	         Around DKK (30) million
• GN Total	 DKK 350-450 million

Amortization of intangible assets and financial items is expected to amount to
approximately DKK (50) million and profit before tax is thus expected to be
DKK 300-400 million. 

All expectations are expressed in approximate numbers and are based on an
average DKK/USD exchange rate of 5.00. 

Teleconference

A teleconference will be held on February 24, 2010 at 10.30 a.m. CET. Please
see www.gn.com for dial-in details. 


For further information, please contact:

Mikkel Danvold
Director, IR & Communications

GN Store Nord A/S
Tel.: +45 45 75 02 71