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UPDATE 1-Cost cuts, rising sales help GN Store Nord lift profits
May 3, 2013 / 7:00 AM / 4 years ago

UPDATE 1-Cost cuts, rising sales help GN Store Nord lift profits

* Q1 underlying EBITA 258 mln DKK vs 259 mln forecast

* Revenue up 10 pct to 1.63 bln, exceeding forecasts

* Keeps 2013 outlook unchanged (Adds analyst comment, details, background)

COPENHAGEN, May 3 (Reuters) - Cost cuts and improved sales in its two biggest business units helped Danish hearing aid and headset maker GN Store Nord to deliver a more than 50 percent rise in first-quarter operating profit.

The company, which competes with Swiss group Sonova , Germany’s Siemens and compatriot William Demant, said on Friday it was also keeping its full-year 2013 guidance unchanged.

GN in February last year launched a cost cutting programme, including consolidation of U.S. manufacturing sites, and has developed new devices, including some compatible with Apple’s iPhone.

It said the restructuring programme was on track and had improved its EBITA (earnings before interest, tax and amortisation) margin to 16 percent in the first quarter against 10 percent in the same quarter a year ago.

For 2013, the group is aiming for organic revenue growth of 9-12 percent, and an EBITA improvement of 40 to 50 percent compared with 2012.

Revenue in its hearing aid unit, GN ReSound, rose 7 percent in the quarter and was up 15 percent in its headset division, GN Netcom, including 20-percent organic growth.

“Particularly GN Netcom looks impressive,” said Sydbank analyst Morten Imsgaard. “A lot of people had been sceptical regarding their goal for 20 percent (organic) growth.”

GN Netcom’s revenue was partly driven by Unified Communications headsets, through which computers can be used as telephones, as well as headsets for mobile telephones.

Group underlying EBITA rose to 258 million crowns ($45.3 million), matching forecasts in a Reuters poll, while revenue increased by 10 percent to 1.63 billion, exceeding forecasts.

$1 = 5.7019 Danish crowns Reporting by Mette Fraende, additional reporting by Stine Jaobsen and Ole Mikkelsen; Editing by David Cowell and Mark Potter

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