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WDH Falls as Government Cuts Hurt Device Sales: Copenhagen Mover

William Demant Holding A/S (WDH) fell the most in a week to become the second-worst performing stock in the Copenhagen benchmark index, after Exane BNP Paribas said government spending cuts are hurting sales.

The Nordic region’s biggest hearing-aid maker fell as much as 2 percent to 465.30 kroner. The stock declined 1.1 percent to 469.90 kroner at 12:42 p.m. in the Danish capital with 42,528 shares traded. Daily trading in William Demant has averaged 121,144 shares in the past three months.

Governments are cutting back on health-care spending to rein in budgets, while bleak economic prospects are curbing consumer spending. That’s having more of an impact on hearing aid sales than industry analysts had predicted, and supports a “pretty cautious” outlook for 2013, according to Exane analyst Romain Zana. He lowered his recommendation on the stock to underperform from neutral and set a 440-krone price target.

The current share price “does not reflect the changing environment,” Zana said in a note to clients, after attending the American Academy of Audiology’s annual meeting last week in Los Angeles. “Hearing aids have proven more sensitive than initially expected to public spending/reimbursement and consumer sentiment.”

Shares in Smorum, Denmark-based William Demant have dropped 6.8 percent since April 3, after it said it would buy Neurelec, a maker of hearing implants. Demant is taking on Sonova (SOON) Holding AG with the purchase, though it will take “several years” to expand the business, Zana said.

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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