[GNSUF] More info on GN Great Nordic
GN Great Nordic Sells SONOFON Stake and Increases Earnings Forecast for 2000
View RealVideo-clips of the press conference hosted by GN Great Nordic:
The reason for the sale of SONOFON and the reason for TELENORs acquisition.
Details regarding the proceeds from the sale.
Q&A concerning the transaction and expectations for the future of SONOFON.
GN Great Nordic will continue to strengthen its three core businesses.
If you experience any problems viewing the video, please click here!
GN Great Nordic has signed an agreement to sell its 53.5 % shareholding in SONOFON Holding A/S (www.sonofon.dk) to Telenor AS, the incumbent Norwegian telecommunications company (www.telenor.no).
The value of the transaction is DKK 14.7 billion on an enterprise value basis. GN Great Nordic's share of SONOFON's interest bearing debt is approx. DKK 1.5 billion, including an intercompany loan of approx. DKK 0.6 billion. Telenor will purchase the intercompany loan from GN Great Nordic. GN Great Nordic will realize an accounting gain of approx. DKK 12.9 billion in 2000.
GN Great Nordic has sold its stake in SONOFON to increase focus on its three ICT (Information, Communication and Technology) companies: GN Nettest, GN ReSound and GN Netcom. The potential of the three companies is very high as they are technological leaders in their business areas. GN Great Nordic expects to meet its previously announced financial targets, such as an estimated 25% annual growth in earnings per share (adjusted for non-recurrent items and goodwill).
During the past eighteen months GN Great Nordic has invested more than DKK 5 billion in acquisitions. Proceeds from the sale of its SONOFON stake will be used primarily to continue making acquisitions to strengthen its three core businesses. GN Great Nordic plans to acquire high growth companies to complement its existing core businesses, particularly GN Nettest. In addition, GN Great Nordic will repay up to DKK 4 billion of bank debt.
If GN Great Nordic cannot complete acquisitions which meet its strategic goals it will consider, among other possibilities, a share repurchase or payment of an extraordinary dividend. Thus, the proceeds will be used in accordance with GN Great Nordic's objective of maximizing the return on shareholders' investment.
GN Nettest is the world's leading provider of equipment and systems for monitoring and testing fiber optic networks and signaling in GSM networks. GN Nettest is one of the four leading suppliers of network management systems. The company is active in high growth markets. Its revenues have increased annually by approx. 40% for several years and its earnings by a substantially higher rate. For 2000, GN Nettest forecasts revenues exceeding DKK 1.6 billion and an improvement in EBITA margin from 10.1% in 1999.
GN ReSound is the world's second largest manufacturer of hearing instruments and audiological equipment. Since its acquisitions in 1999 of ReSound Corporation and in 2000 of Beltone Electronics, GN ReSound has become the no. 1 or no. 2 player in all significant markets globally. It is estimated that GN ReSound's markets are growing at 6-8% annually, with the highest growth being in the field of digital hearing instruments, in which GN ReSound holds a leading position. It offers a wide range of hearing instruments under its ReSound, Beltone, Philips, Danavox, and Viennatone brand names. GN ReSound forecasts revenues at DKK 2.2 billion in 2000 and an EBITA margin of about 10%. The EBITA margin is projected to increase substantially as acquired companies are integrated, allowing full scale exploitation of synergies.
GN Netcom is the world's second largest manufacturer of headsets. The company is achieving substantial growth in its existing core market of headsets for call centers. GN Netcom is rapidly increasing its presence in the new business areas of headsets for mobile telephones, office use and PC solutions. GN Netcom recently acquired Jabra, the US leader in headsets for mobile telephones, to strengthen its position in this new business area. GN Netcom is a technology leader and expects to begin selling the world's first Bluetooth headsets within the next few months. GN Netcom expects to achieve organic revenue growth of over 25% in the coming years. In 2000, GN Netcom projects revenues in excess of DKK 1.4 billion and EBITA margin improvement from 20.4% in 1999.
If the sale of GN Great Nordic's 53.5% stake in SONOFON closes by 30 September 2000, GN Great Nordic projects revenues this year of about DKK 7 billion and income before extraordinary items of about DKK 500 million. Accordingly, forecast earnings for 2000 will be increased by approx. DKK 100 million, to which should be added a non-recurring gain of approx. DKK 12.9 billion from the sale of the stake in SONOFON. As previously reported, GN Great Nordic will incur restructuring costs of DKK 140 million, primarily connected with the acquisition of Beltone.
Background for the Sale of SONOFON
Through the sale of its SONOFON stake, GN Great Nordic is further concentrating its activities in its three core businesses.
The decision to sell the stake in SONOFON was made on the basis of mobile telephony market developments in Europe, where many mergers and acquisitions have occurred and further consolidation is expected. Critical mass, an extensive international network, and efficient product development are increasingly important. It is vital for SONOFON to be owned by strong international shareholders committed to the telecommunications industry.
GN Great Nordic has agreed to sell its entire stake in SONOFON to Telenor, which is not currently active in the Danish wireless telecommunications market. This sale is in accordance with the shareholders' agreement between GN Great Nordic and BellSouth, owner of the remaining 46.5% of
SONOFON. In addition, GN Great Nordic has attached great importance to obtaining a solution which will improve SONOFON's competitiveness and benefit the company's employees.
A condition for the sale of the shares to Telenor is approval by the Danish Telecommunications Agency, Telestyrelsen, and the relevant European anti-trust authorities. SONOFON's operational and investment activities will continue as planned. This year, SONOFON will invest about DKK 600 million, primarily in the development of data services. The company will also continue its preparations for the UMTS (Universal Mobile Telephony System) and FWA (Fixed Wireless Access) licensing rounds.
SONOFON is the second largest telecommunications company in Denmark. Its core business areas are mobile telephony, wireless data, and fixed wireless systems. The company was established in 1991, and in 1992 the first calls were made on its nationwide 900 MHz GSM network. The company later obtained a 1,800 MHz DCS license as well. At the end of 1999, SONOFON had a market share of about 35%, as measured by the number of subscribers. SONOFON markets its services and telecommunications equipment through an extensive sales network, which includes 1,200 retail stores, 30 of which are specialty stores owned by SONOFON. The company also provides fixed network services to more than 40% of Denmark's major corporations and public sector institutions.
SONOFON's revenues for the year 2000 are projected at approx. DKK 3.5 billion and earnings (EBITDA) are expected to increase from the 1999 level of DKK 736 million.
UBS Warburg has acted as sole financial advisor to GN Great Nordic in the sale of its SONOFON stake.
Press Conference Today at 12:00 noon
Members of the press and analysts are invited to attend a press conference today at 12:00 noon at the Radisson SAS Scandinavia Hotel, Amager Boulevard 70 in Copenhagen. President & CEO J›rgen Lindegaard and Executive Vice President J›rn Kildegaard of GN Great Nordic, as well as Telenor Senior Executive Vice President Terje Thon and Telenor Mobile Communications COO Morten-Karlsen S›rby from Telenor will be present at the press meeting. Simultaneously, Telenor President and CEO Tormod Hermansson and Telenor Mobile Communications CEO Arve Johansen will hold a press conference in Oslo. The meetings will be connected by satellite link. The press meeting is expected to last about 90 minutes.
Press Conference Live at www.gn.com
Today's press conference can be viewed directly on GN Great Nordic's web site - www.gn.com - starting at 12:00 noon. RealPlayer (www.real.com) must be installed before the transmission can be seen and heard. It is recommended that this program be downloaded about 30 minutes before the press conference begins.
Teleconference for Analysts at 3:30 pm
GN Great Nordic will hold a teleconference mainly for foreign analysts and investors at 3:30 pm. Executive Vice President J›rn Kildegaard, Chief Financial Officer Poul Erik Tofte and Vice President Investor Relations Lars Thomassen will be present at the conference. If you are interested in participating in the conference, please contact Lars Thomassen at (+45) 7211-1862 by 2:30 pm at the latest.
GN Great Nordic is an internationally expanding group of ICT (Information and Communications Technology) companies. The GN Great Nordic Group now has three core businesses - GN Nettest, GN ReSound and GN Netcom - all of which are leaders in their high growth markets. GN Great Nordic is listed on both the Copenhagen and London stock exchanges. GN Great Nordic seeks to create a high return on shareholder investment through active ownership of market leading, profitable ICT companies.
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