Danske Bank Hearing Aid Seminar June 22, 2021 1 Safe harbor statement The forward-looking statements in this report reflect the management's current expectations of certain future events and financial results. Statements regarding the future are, naturally, subject to risks and uncertainties, which may result in considerable deviations from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events, which may prove incorrect. Factors that may cause actual results to deviate materially from expectations include – but are not limited to – general economic developments and developments in the financial markets, technological developments, changes and amendments to legislation and regulations governing GN’s markets, changes in the demand for GN's products, competition, fluctuations in sub-contractor supplies and developments in ongoing litigation (including but not limited to class action and patent infringement litigation in the United States). This presentation should not be considered an offer to sell or buy securities in GN Store Nord. 2 Agenda Introduction Hearing aid market opportunities GN strongly positioned Appendix 3 GN at a glance Global leader in intelligent audio solutions Global reach, local presence • Founded in 1869 and listed on Nasdaq Copenhagen • Technology-driven company primarily developing and manufacturing hearing aids (GN Hearing) and headsets, speakers and video (GN Audio) • Innovation leader with expertise in the human ear, sound and wireless technology under one roof • Unique portfolio of medical, professional and consumer audio solutions and deep R&D expertise (total R&D spend of DKK >1 billion per year) • Strong track record of strategic partnerships with leading channels, customers and adjacent industry technology leaders Countries with GN offices Countries with GN distributors Business areas and brands Financial summary Revenue & organic growth EBITA & EBITA margin FCF & cash conversion* GN Hearing - GN Audio (DKK million & %) (DKK million & %) (DKK million & %) 13,449 200 12,574 2,321 1,865 150 10,607 1,956 9,585 1,866 1,296 15% 1,744 100 1,134 1,110 100% 18.4% 18.5% 50 13% 9% 18.2% 65% 57% 56% 13.9% 0 8% -50 -100 2017 2018 2019 2020 2017 2018 2019 2020 2017 2018 2019 2020 *FCF: Free cash-flow excluding M&A, cash conversion: FCF / EBITA 4 GN’s investment case is intact Focused innovation within sound and video processing in selected market segments Leading positions in attractive markets with high entry barriers Focused growth model, dedicated developer, manufacturer and distributor, refraining from vertical integration Clear strategy underpinned by deep technology expertise and strategic global partnerships Profitability in line with or better than peers Strong cash conversion and asset light business model 5 The hearing aid market remains very attractive and robust in the mid to long term 01 ~4-6% expected unit CAGR in coming years1 03 Multiple attractive megatrends driving market growth Global hearing aids market growth1 • 65+ population expected to grow significantly in the years to come (unit growth) ~4-6% • Baby boomers generation reaching retirement age • Increasing noise pollution drives prevalence of hearing loss • Increasing wealth among larger middle class ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20E GDP growth (annual %)2 0% GDP growth 02 Room for penetration growth 04 High entry barriers to the market Penetration still low, especially for less Profound severe hearing loss Severe Moderately severe Moderate Regulations Technology Distribution Mild Source: MarkeTrak, EuroTrak, GN estimates 1) ASP decline of 1-2%. Based on company estimates, industry association EHIMA 2) World bank 6 Worldwide: 80% of people with a hearing loss currently live without hearing aids Not penetrated Penetrated 80%7 20% Source: MarkeTrak, EuroTrak, GN estimates 7 The worlds largest hearing aid market is substantially underpenetrated Hearing aid owners 1.3 M Profound Hearing aid non-owners ~250 M 5.6 M Adults in the US Severe 33 M ~30% Adults with self- 16.5 M penetration acknowledged Moderate rate hearing loss “Hearing loss is one of the most common health conditions affecting 9.6 M Mild older Americans” - MA Senator, Elizabeth Warren Source: MarkeTrak, census.gov 8 Low penetration is a major opportunity across the world Penetration rate among adults with self-acknowledged hearing loss ~5% ~40% ~15% ~35% ~30% ~30% Source: MarkeTrak, EuroTrak, GN estimates 9 Living with untreated hearing loss increases the risk of health problems • The incidence of dementia is greater in people with hearing loss1, and early studies show that wearing hearing aids may have a postive effect on cognitive function2 • People with mild hearing loss were nearly three times more likely to have a history of falling than those with no hearing loss3. One study shows that wearing hearing aids may improve balance4 • Wearing hearing aids reduce the risk of depression5 • Untreated hearing loss reduces quality of life6 References: 1 Lin FR, Metter EJ, O'Brien RJ, Resnick SM, Zonderman A, Ferrucci L. Hearing loss and incident dementia. Arch Neurol. 2011 Feb;68(2):214-20 2 Lancet Commission on Dementia Prevention: Intervention and Care Reference, August 2019 3 Lin F. & Ferrucci, L. (2012) Hearing Loss and Falls Among Older People in the United States. Arch Intern Med. 2012;172(4):369-371 4 Hullar, T: The effect of hearing aids on postural stability. Laryngoscope, 2014. 5 Hearing Industries Association: MT10:MarkeTrak, March 27, 2019 6 Kochkin, S. MarkeTrak VIII: Patients report improved quality of life with hearing aid usage, Hearing Journal, Vol. 64 (6), June 2011. 10 New hearing aid users are on a five-step journey taking on average 6 years 6 years Between getting aware of hearing difficulty, to getting a hearing aid Hearing loss acceptance Hearing aid acceptance Purchase Adaption Satisfaction Awareness Solution-seeking Decision-making Onboarding Ongoing Use Re-purchase Time (years) 0 4 5 6 → 11 → Replacement after ~5 years Source: MarkeTrak 10 11 Buying a hearing aid is not like buying a car but rather like buying tyres… If your car need new tyres… Your primary choice is which service provider to visit Tyre fitting specialist chain Multi-line auto supermarket Your local Audi dealer An independent local fitter 12 Buying a hearing aid is not like buying a car but rather like buying tyres… If you need new hearing aids… Your primary choice is which service provider to visit Hearing specialist chain Multi-line supermarket Your local Beltone dealer An independent local fitter 13 What are the 80% non-users looking for? Do not want a Interested in tech but traditional Hearing Aid want an easy solution Lack of recognized Want a consumerized All in One hearing difficulty approach Source: GN studies 14 Focus on the individualized customer experience 15 People have become increasingly comfortable having something in the ear Volume in millions* True Wireless earbuds Hearing aids 2014 2015 2016 2017 2018 2019 2020 *Indicative Source: HIA, GN estimates 16 Hearing aid industry characterized by traditional sales channels Traditional sales channels Government Manufacturing Independent Large retail channels owned retail retail ... and online slowly emerging 17 Enabling more remote support and telehealth options Example: ReSound Assist Live Return to the HCP to purchase and Return to the First HCP visit First Fit HCP for Daily for an evaluation Product adjusting the use onboarding fitting Via ReSound Assist Live: Current • Adjustments customers • Counseling Expanding • Troubleshooting routes to • Pre-programed hearing aids from current audiogram at home customers... Customers delivery with • ReSound Assist Live fine-tuning and counseling session and audiogram follow-up • In-office follow-up for full diagnostic testing • Mobile testing curbside or in-home - program hearing aids in the office if curbside New • In-office follow-up for full diagnostic testing customers with • In-situ hearing test in-home with pre-programmed hearing aids and program via ReSound Assist Live no audiogram • In-office follow-up for full diagnostic testing 18 Providing opportunities for branded hearing aids Example: Jabra Enhance Pro launched into Costco Jabra Enhance Pro Jabra Enhance Pro – a new, premium line-up featuring M&RIE Leveraging GN’s advanced medical grade hearing technology and Jabra’s consumer audio expertise through a well-known audio brand 19 80% current non-users: Addressing the needs Important factors for the 80% non-users Consumerized Awareness Convenience Fitting Accessibility Form factor Non-medical experience Features 20 20 GN Store Nord strongly positioned with; GN Audio and GN Hearing under the same roof 21 www.gn.com E-mail: [email protected] Henriette Wennicke, VP – IR & Treasury, Tel.: +45 4575 0333 Q&A Rune Sandager, Director – IR & Treasury, Tel.: +45 4575 9257 22 Agenda Introduction Hearing aid market opportunities GN strongly positioned Appendix 23 GN Store Nord – five-year performance DKK million 2016 2017 2018 2019 2020 GN Store Nord Revenue 8,651 9,585 10,607 12,574 13,449 Organic growth 6% 8% 13% 15% 9% Gross margin 62.4% 62.7% 62.0% 60.3% 54.3% EBITA 1,583 1,744 1,956 2,321 1,866 EBITA margin 18.3% 18.2% 18.4% 18.5% 13.9% Operating profit 1,445 1,558 1,796 2,002 1,627 Financial items -52 -60 -203 -92 -6 Profit before tax 1,395 1,504 1,606 1,913 1,612 Effective tax rate 22% 25% 22% 23% 21% Net profit 1,086 1,122 1,247 1,468 1,269 ROIC (EBITA/Invested capital) 20% 21% 24% 25% 19% Free cash flow excl. M&A 1,179 1,134 1,110 1,296 1,865 Cash conversion* 74% 65% 57% 56% 100% EPS 7.34 8.07 9.25 11.12 9.72 * Free cash flow excl. M&A / EBITA 25 GN Hearing – five-year performance DKK million 2016 2017 2018 2019 2020 GN Hearing Revenue 5,156 5,615 5,833 6,351 4,725 Organic growth 6% 6% 7% 7% -24% Gross margin 69.0% 69.4% 69.2% 69.0% 61.5% EBITA 1,062 1,153 1,194 1,284 41 EBITA margin 20.6% 20.5% 20.5% 20.2% 0.9% ROIC (EBITA/Invested capital) 17% 18% 19% 19% 1% Free cash flow excl.