UPDATE 2-William Demant's profit up, sees fair 2010 growth

* EBIT up 10 pct at 1.15 bln crowns ($210 mln),below f'cast

* Company says it gained market share in a flat market

* Sees its 2010 wholesales of hearing aids outpacing market (Adds details, quotes; updates share price)

COPENHAGEN, March 11 (Reuters) - Danish hearing aid maker William Demant (WDH.CO) reported higher sales and earnings for 2009 as it gained market share in a flat market, and said it hoped for a better 2010 when sales to U.S. veterans kick in.

"Overall, the market developed flatly, which means that with a 6 percent increase in revenues, the group captured market share," the company said in a statement, adding that it was helped by a strengthened product portfolio in its Oticon unit.

Earnings before interest and tax (EBIT) rose to 1.15 billion Danish crowns ($210 million) from 1.04 billion in 2008. The result lagged analysts' average expectation of 1.18 billion crowns and came at the low end of the range of estimates in a Reuters poll. [ID:nLDE6241MR]

"At first glance, the report looks quite satisfactory," Nordea said in a note to clients. "Among the key figures, revenues were a little higher than expected but earnings were a little lower."

Consolidated revenue increased to 5.70 billion crowns in 2009 from 5.37 billion, with about half the growth coming from acquisitions, the company said. That was slightly above the average market forecast of 5.65 billion.

"In 2010, we expect fair growth in both consolidated revenues and operating profits (EBIT)," the company said, adding that it expected its wholesales of hearing aids to exceed market growth by 3-5 percentage points in the year.

Alm. Brand analyst Michael Friis Jorgensen called the guidance "relatively neutral".

Cash flow from operating activities last year rose by 15 percent to 950 million crowns, Demant said.

William Demant, a rival to Switzerland's Sonova (SOON.VX), the hearing aid unit of Germany's Siemens (SIEGn.DE) and Denmark's GN Store Nord (GN.CO), said its ability to generate cash flow remained strong.

William Demant has pinned big hopes on its new position as a supplier of hearing aids to the U.S. Department of Veterans Affairs (VA), encroaching on Sonova's Phonak brand.

The company noted that up until almost the end of 2009 it had been unable to sell to the VA, one of the world's largest buyers of hearing aids, during a period in which the veterans' administration increased its demand.

"The group's top line in 2010 will also be driven by sales to the VA that we sold very little to in 2009," Chief Executive Niels Jacobsen told analysts in a conference call.

He added that VA sales were only a small part of the group's total business in 2009.

Jacobsen said wholesale hearing aid prices were expected to be flat, and he said the market volume forecast for 2010 was in line with the company's mid-term to long-term expectations.

Jacobsen said that the company would consider whether to start up a new share buyback programme in late 2010 or in 2011 after such programmes were suspended in 2009.

Shares in William Demant were down 1.6 percent at 401.10 crowns by 1412 GMT, underperforming a flat Copenhagen bourse .OMXC20. ($1=5.483 Danish crowns) (Reporting by John Acher; Editing by David Cowell)