COPENHAGEN (Reuters) - Denmark’s GN Resound is banking on a hearing aid packed with bluetooth-like technology that lets users listen to calls and music from their iPhones as it seeks to steal a march on its rivals, its new chief executive told Reuters.
Anders Hedegaard laid out his plans for the company - the hearing aid business of GN Store Nord - for the first time since taking the helm on August 1 in a change of management that surprised investors and analysts.
After four years of cutting costs to boost operating margins, GN Resound now wants to grow faster than the global market, which grew about 4 percent last year in terms of sales.
“The restructuring is over and now it’s innovation and growth that are the priorities,” said Hedegaard.
The world’s fourth-largest hearing aid maker, with a 16 percent market share, has worked with Apple Inc to develop the Resound Linx device that allows users to wirelessly transmit content from iPhones directly into their ear.
GN Resound hopes this will banish the stigma that many people feel when wearing an aid by linking it to a fashionable brand.
As the world’s population ages, and lives longer, the industry has become fiercely competitive - and the company aims to gain an edge by appealing to the iPhone generation as it ages.
“We expect Linx to be the biggest driver behind our gaining market share for the rest of the year,” Hedegaard said in a telephone interview. “The hearing aids industry is driven by products so it is important to develop devices which have advantages. We are very conscious about this.”
Together with Danish peers William Demant and unlisted Widex A/S, GN Resound supplies half of the world’s hearing aids. The world’s biggest manufacturer is Swiss group Sonova, with a market share of around 24 percent.
The Resound Linx, launched globally earlier this year, is the first device on the market to wirelessly transmit phone content, but GN Resound’s competitors are working on similar products.
Parent GN Store Nord gave no reason for the change of chief executive at its hearing aid unit. The move surprised many analysts, who praised the work of previous boss Lars Viksmoen and said they would wait and see how Hedegaard, a former CEO of small biotech company Bavarian Nordic, performed.
Shares in GN Store Nord are down 5.65 percent since the change was announced in May, lagging Sonova’s 5.4 percent rise and William Demant’s 0.8 percent fall in the same period.
GN Store Nord is expected to increase its second-quarter earnings before interest, tax and amortization (EBITA) by 11.7 percent year-on-year, when it reports its results on Aug. 14, a Reuters poll of analysts showed on Monday.
Analysts from Jyske Bank and Handelsbanken also expect the company to raise its full-year revenue and EBITA guidance for GN Resound.
William Demant also reports on Aug. 14, but as the company does not disclose quarterly figures the numbers will be for the first half of 2014. Its earnings before interest and tax (EBIT) are expected to be up by 4.8 percent compared with the same period last year, a Reuters poll of analysts showed.
Editing by Sabina Zawadzki and Pravin Char