In Q2, GN continued to see clear results of the comprehensive
restructuring
undertaken during 2009. Organic revenue growth was positive for
the second
consecutive quarter and ended at 3%. EBITA improved from DKK 2
million in Q2
2009 to DKK 113 million. 

Fuelled by Unified Communications
(UC), GN Netcom generated 8% organic revenue
growth compared to the same
quarter last year. Excluding the OEM business in
Mobile Headsets, organic
growth was 20%. Driven by the operational leverage
resulting from revenue
growth and the successful restructuring, GN Netcom
reached a double-digit
EBITA margin in Q2 at 10.5%. GN Netcom continues to
launch innovative products
and during the next few months, GN Netcom will
expand the UC product portfolio
with a UC-enabled speakerphone. 

GN ReSound generated flat organic revenue
growth compared to the same quarter
last year and broke the negative organic
growth seen during the last five
quarters. EBITA was DKK 63 million, up from
DKK 54 million last year. Based on
the successful launch of the Surround Sound
by ReSound™ featured products
ReSound Live™ and dot2 by ReSound™ in late 2009
combined with the ongoing
global launch of ReSound Alera™, GN ReSound expects
to outgrow the market in
the second half of 2010. Initial customer response
confirms that ReSound Alera™
is a groundbreaking advance in wireless hearing
aids. 

The ongoing end-to-end transformation of the GN ReSound manufacturing
and
supply chain is progressing as planned and, as announced, is expected
to
deliver up to DKK 200 million in cost reductions as a run rate by the end
of
2011, coupled with improved quality and increased customer service levels.


Based on the performance of GN ReSound and GN Netcom during the first half
of
the year and the current macroeconomic environment, GN confirms the revenue
and
EBITA outlook provided in the Q1 Interim Report 2010. 

Highlights
•
Total revenue was DKK 1,286 million corresponding to 3% organic
growth
compared to Q2 2009. 

• Total EBITA was DKK 113 million, up DKK 111
million compared to Q2 2009.

• GN Netcom revenue was DKK 495 million
equivalent to organic growth of 8% and
EBITA was DKK 52 million up from DKK
(43) million last year. Excluding Mobile
OEM, organic growth was 20%. 

• GN
ReSound's revenue was the highest since Q4 2008, DKK 789 million.
Organic
growth was flat and in line with expectations. Above market growth is
still
expected for the second half of 2010. EBITA was DKK 63 million, up from
DKK 54
million last year. 

• 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
parties to the DPTG/TPSA arbitration proceedings
have been informed by the
Arbitration Tribunal in Vienna that a decision on
the award will not be issued
before September 2010 due to logistical reasons.


• On May 5, GN received the complete wording of the ruling in which the
German
Federal Supreme Court declared the decision made by the German Federal
Cartel
Office (Bundeskartellamt) on April 11, 2007 prohibiting the sale of GN
ReSound
to Sonova unlawful. GN will file a claim against the German Federal
Cartel
Office claiming compensation for the losses imposed on GN which as of
July 2010
amount to around EUR 1 billion. 

• In May, GN announced and
completed a DKK 88 million share buyback program.
The program was initiated in
order to cover GN's long-term incentive program. 

• GN aims to pay out a
dividend corresponding to 15-25% of the annual net
results and will initiate
share buyback programs when deemed appropriate
subject to the authorization of
the Annual General Meeting of shareholders. It
is GN's long-term target to
maintain a capital structure consisting of a
combination of debt and equity,
subject to a net interest-bearing debt of up to
a maximum of two times EBITDA.


”UC is clearly taking off now, we have increased the revenue from UC
enabled
products with more than 50% compared to Q2 2009 - although from a low
base. We
are currently expanding our sales and marketing organization in
selected areas
in order to capture this attractive opportunity,” says CEO GN
Netcom, Mogens
Elsberg 

 “We expect to grow above the market in the second
half of 2010. This
expectation is building on the successful introduction of
the Surround Sound by
ReSound™ featured products ReSound Live™ and dot2 by
ReSound™ in late 2009,
combined with the global launch of ReSound Alera™,”
says CEO GN ReSound, Lars
Viksmoen