June 14, 2018 / 7:29 AM / in a year

Hearing aid group GN Store Nord ups forecasts for headset business

COPENHAGEN (Reuters) - Danish hearing equipment maker GN Store Nord (GN.CO) raised its 2018 sales and profit forecast for its headset business on Thursday, sending its shares up more than eight percent.

The upgrade was driven by new product launches in business headsets, Rene Svendsen-Tune, head of GN Store Nord’s audio business GN Audio said.

“We have taken significant market shares from our rivals, including Plantronics (PLT.N), and we expect this to continue,” Svendsen-Tune told Reuters.

Business headsets are used mainly in offices and call-centers.

The company’s shares are up 32 percent this year and traded 7.9 percent higher at 0808 GMT at 270.9 crowns, which is a new record high.

“They have the best product portfolio, they seem to have the best sales and distribution setup so they manage to benefit from the underlying market demand for headsets,” Sydbank analyst Morten Imsgard said.

GN Store Nord’s biggest business is hearing aids, but the company has been aiming for a bigger share of the rapidly growing wireless headset or earbuds market.

Earlier this year, the company introduced a new product challenging Apple’s (AAPL.O) Airpods.

In hearing aids, GN Store Nord cooperates with Apple on a product which can offer remote tuning and direct-streaming from an Apple iPhone to a hearing aid.

Hearing aid makers have been benefiting from rising demand from ageing populations, but also need to invest more in R&D to provide products that appeal to more tech-savvy customers.

Last month, two hearing aid groups - Widex and Sivantos - announced a merger to create the industry’s number three in a challenge to market leaders Sonova (SOON.S) and William Demant WDH.CO.

GN Audio, known for its Jabra brand, makes wireless and corded headsets for a variety of uses, including for offices and call-centers. GN’s audio division accounts for around 40 percent of the company’s revenue, while the hearing aid division contributes about 60 percent.

GN Audio, which had raised its 2018 sales growth forecast in May, has now raised it to 15 percent from around 9 percent. It expects an EBITA margin of more than 18 percent versus previous guidance of more than 17 percent.

Reporting by Emil Gjerding Nielson, editing by Stine Jacobsen, Jason Neely and Jane Merriman

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