At its meeting on November 6, GN’s Supervisory Board made a decision about the future of GN ReSound. Please read the article below.

Financial highlights

The fi nancial results improved substantially from an EBITA of DKK (126) million in Q3 2006 to DKK 12 million in 2007. However this result was still slightly below expectations for Headsets (continuing operations).

CC&O Headsets showed overall good organic growth with the strong growth continuing in Europe and in the Asia Pacific region as well. North America is still producing disappointing growth and results.

Organic growth in Mobile Headsets improved significantly from (54%) in Q2 2007 to (12%) in Q3. The results in Mobile Headsets progressed well, but they are still as a total negatively affected by the low level of revenues. A breakthrough has been made for the Mainstream Mobile business which showed for the first time a positive EBITA.

GN has secured important programs with key clients for next year and in September we were able to announce that GN is the first company to have headsets approved by Microsoft® for use with the Microsoft® Office Communicator (OC).

Microsoft® OC is a unified communications system that helps people communicate easily with others in different locations using a range of different communication options, including instant messaging (IM), voice, and video. GN also signed a milestone supply chain agreement and the ongoing restructuring of the business is generally proceeding in line with the strategy.

You will find a summary of the Q3 results on page 4.

The strategy process continues

On September 27 GN took another important step in the restructuring of its headset business when we signed a supply chain agreement through which we intend to expand our business relationship with a major global electronics manufacturing services (EMS) provider. The agreement includes production, fulfi llment and other logistical services. As part of the expanded relationship, GN has started up fulfillment operations in the EMS provider’s facility in the Czech Republic. This event represents a key step in GN’s strategy to increase scalability and flexibility in the cost base in relation to fluctuating demand and also to improve quality throughout the value chain.

You can read more about the restructuring of GN’s supply chain on page 3.

Looking ahead to the near future, we have only a few weeks to go till the end of the year and, for GN, this is the most important quarter of the year. Last quarter we showed already strong improvements but this fourth quarter we have to demonstrate to ourselves, our customers and our shareholders that we can continue the progress we have made in reengineering the business.

Best regards

Toon Bouten
CEO