Interim Report Q2 2018: Continued double digit organic revenue growth drives strong EBITA margin increase. GN Audio upgrades organic growth guidance

Announcement

Aug 22, 2018

GN Store Nord A/S

  • GN Store Nord delivered 11% organic revenue growth in Q2 2018. Revenue growth was 7% including around (5)% impact from development in foreign exchange rates
  • EBITA margin increased 1.5 percentage points in Q2 2018 as a function of strong operational execution
  • EPS increased 10% compared to Q2 2017
  • Continued strong cash conversion at 75% in Q2 2018
  • GN Audio’s organic growth guidance for 2018 is upgraded to “16-19%” from “up to 15%” following the strong performance in Q2 2018. The financial guidance for GN Hearing is unchanged
  • GN Hearing delivered 6% organic revenue growth in Q2 2018. Revenue growth was 1% including around (5)% impact from the development in foreign exchange rates
  • EBITA increased 9% to DKK 278 million. The EBITA margin increased 1.4 percentage points vs Q2 2017 and reached 19.4%
  • Free cash flow excl. M&A was DKK 106 million in Q2 2018, translating into a cash conversion of 38%, reflecting investments in growth including inventory build ups ahead of the launch of the world’s first Premium-Plus hearing aid: ReSound LiNX Quattro™, announced early August
  • GN Audio delivered unprecedented 19% organic revenue growth in Q2 2018. Revenue growth was 16% including around (4)% impact from the development in foreign exchange rates. The continued strong momentum was driven by Jabra's professional headset business
  • EBITA increased 23% to DKK 207 million, compared to DKK 168 million in Q2 2017. The EBITA margin increased 1.1 percentage points vs Q2 2017 and reached 18.3%
  • Free cash flow excl. M&A was DKK 289 million in Q2 2018 compared to DKK 131 million in Q2 2017. Cash conversion at 140%

Quotes from the executive management

Anders Hedegaard, CEO of GN Hearing: “In Q2, we saw continued strong demand in the important independent market for our ground-breaking ReSound LiNX 3D product family. And in August we announced our new Premium-Plus ReSound LiNX Quattro hearing aid, confirming that our innovation machine continues to deliver. With the combination of ReSound LiNX 3D and the newly announced ReSound LiNX Quattro we are on track to deliver on our promises for 2018.”

René Svendsen-Tune, CEO of GN Audio: “I’m very pleased with the continued strong execution and performance across the entire organization. Again in Q2, we delivered market-leading organic growth – surpassing our own ambitious targets. Our CC&O business continued to deliver strong double digit organic growth, and our consumer business returned to positive organic growth.”

Teleconference
GN will host a teleconference at 11.00 am CEST today. Please visit www.gn.com/investor to access the teleconference. Presentation material will be available on the website approximately one hour prior to the teleconference.

For further information please contact:

Peter Justesen
VP – Investor Relations & Treasury
GN Store Nord A/S
Tel: +45 45 75 87 16

or

Rune Sandager
Senior Investor Relations Manager
GN Store Nord A/S
Tel: +45 45 75 92 57

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