* FY op profit 1.65 billion crowns vs f'cast 1.7 bln
* Analysts see forecast cuts for current year
* Pins hopes on new devices including Oticon Alta
* Shares down 4 percent, hit lowest since Jan 2012
(Recasts, adds analyst comments, shares)
By Balazs Koranyi and Stine Jacobsen
COPENHAGEN, Feb 26 Danish hearing aid maker
William Demant gave lukewarm guidance on Tuesday on its
prospects for the current year, dousing hopes for a revamped
product range and sending its shares to a 13-month low.
Demant said it hoped several new products to be launched
this year - particularly a range called Oticon Alta - would make
up for a weak close to 2012, yet some analysts saw this as
modest guidance for a product with high hopes and warned that
earnings were set to be weaker than earlier thought.
The group, which stands to be a prime beneficiary of
demographic trends as the population ages, nonetheless struggled
in 2012 as rivals like GN Store and Sonova
lured customers with newer, sophisticated devices.
Posting 2012 earnings which fell short of analyst
expectations, the company said it expected revenue growth to
exceed market growth rates by between 3 and 5 percentage points
this year and expected a rise in operating profit.
Yet some analysts detected indications that prices would
continue to be squeezed, even with the launch of Oticon Alta -
which the company says offers improved speech intelligibility
even in difficult listening environments.
"They indicate without explicitly saying that their average
unit price will remain under pressure," Michael Friis
Joergensen, an analyst at brokerage Alm Brand, said. "The
mid-segment of the market is still down ... Market estimates for
2013 should be substantially reduced for 2013."
Demant shares traded 4 percent lower at 463 crowns by 0900
GMT after falling as low as 453 crowns, their lowest since
The firm's full-year operating profit fell to 1.65 billion
crowns ($292.2 million) from 1.71 billion and came short of
analysts' expectation for 1.7 billion.
More importantly, its operating margin shrunk to 19.3
percent from 21.3 percent as rivals cut prices.
"Given the second-half margin miss, we could see an around
10 percent downgrades to consensus EBIT forecasts," JPMorgan
said in a note.
Previous market forecasts for a 2 billion crown operating
profit this year imply a 17 percent rise, a figure that is well
out of reach now, analysts said.
Still, some company watchers said Oticon Alta should help
the firm once sales gain momentum, providing upside for the
"We view management guidance of hearing instrument growth of
3 to 5 percent above 'modest' market growth as conservative,"
UBS said. "We anticipate significant growth assuming Alta is
William Demant shares, down 7 percent over the last 12
months, are valued below peers, reflecting uncertainty on
whether its new products will help to restore its fortunes.
It trades at an enterprise value to 2013 EBIDTA (earnings
before interest, tax, depreciation and amortisation) of around
12.5 to 13, according to Reuters data, below GN Store's 13 to
13.5 multiple and Sonova's ratio above 14.
($1 = 5.6464 Danish crowns)
(Editing by Mark Potter and David Holmes)