Interim Report January - September 2010
Press release, November 9, 2010
Sales up by 52 percent with improved operating margin
Care Electronics now over 80 percent of sales
Highlights of the third quarter of 2010:
- Net sales for the third quarter rose to SEK 168.8 m (111.1), an increase of 52 percent. The Care Electronics business unit generated sales of SEK 137.8 m, accounting for 82 percent of consolidated sales for the third quarter.
- Operating profit (EBIT) amounted to SEK 13.2 m (7.0), while profit for the period increased to SEK 10.7 m (6.4).
- Earnings per share after tax were SEK 0.56 (0.37).
- Cash flow from current activities: negative SEK 21.2 m (positive 1.5).
- Order intake amounted to SEK 205.3 m (139.6), an increase of 47 percent.
- In the third quarter, Doro® extended its cooperation with 20:20 Mobile by signing a significant distribution deal, adding the UK, Italy, Turkey and growth markets in Eastern Europe. In addition, the Group signed agreements with Vodafone in Germany to distribute the Doro PhoneEasy® 338gsm and 342gsm and with operator SFR in France to distribute Doro PhoneEasy® 410gsm.
- Doro's VAT claim in France is expected to be repaid during the fourth quarter of 2010.
- After the end of the period, Doro signed a distribution agreement with Rogers Wireless in Canada to distribute the Doro PhoneEasy® 410gsm.
Comments by the CEO, Jérôme Arnaud:
“The third quarter of 2010 was characterized by a strengthened, record growth in
both revenues and order intake. We increased our sales in all markets, at the
same time as our partners confirmed increased interest in our products and the
special features we offer in cooperation with operators.
Sales generated within the Care Electronics business unit almost doubled, from
SEK 69 m in the third quarter of 2009, to SEK 138 m. Care Electronics accounted
for 82 percent of the Group's total sales for the quarter, which means we have
now achieved our strategic objective for Care Electronics to exceed 80 percent
of our business. The remainder is generated by the Home Electronics business
unit, which now is a profitable, cash-generating operation, having recovered
from its loss in 2009. The continued reduction of costs in the Home Electronics
business unit has resulted in the business unit achieving a profit of SEK 5.6 m
for the quarter and SEK 7.6 m for the first nine months of the year.
I am pleased to report that we are continuing to increase the number of
countries in which our mobile phones are available. At the end of October, we
signed partnership agreements with operators Rogers Wireless in Canada. Our
entry into the Canadian market has been eased by our existing presence in US,
thus enhancing the payback on our investments to secure certification for our
products in the region.
We are also able to report a steadily improved operating margin, with EBIT for
the third quarter of 2010 rising 89 percent compared with the year-earlier
period. This is the seventh consecutive quarter with positive earnings and I am
particularly proud this time as the operating margin amounted to 7.8 percent
(6.3). This increase is the result of higher sales that better absorb our
overhead costs, consisting of investments to prepare new markets, marketing
activities to boost the brand and to increase visibility in retail stores, as
well as the development of new products and new versions of existing models.
Cash flow was negatively influenced by delayed VAT recovery in France following
the implementation of a streamlined Group organization and legal structure in
January 1, 2010. This VAT claim is expected to be repaid during fourth quarter.
We have also been able to maintain efficiency in our logistics systems through
this phase of strong expansion.
Doro® will continue to achieve profitable growth. The brand is well-established
and has become a benchmark in the niche area of telecommunication products for
seniors. Doro's brand is now well positioned with seniors and has a strong
position with leading international operators.”
The full report is enclosed in PDF.
Doro AB discloses the information provided herein pursuant to the Securities
Markets Act and/or the Financial Instruments Trading Act. The information was
submitted for public release on Tuesday, November 9, 2010, at 07:30 a.m. CET.
Doro AB | Corporate reg. no. 556161-9429
Doro is a Swedish company focusing on the development, marketing and sales of
telecom products specially adapted to the growing worldwide population of
seniors. With over 35 years of experience in telecommunications, and sales in
more than 30 countries on 5 continents, Doro is the world's leading brand for
easy-to-use mobile phones. Doro created the Care Electronics category and in
recent years and the products have received several highly distinguished
international design awards. The company had sales of SEK 493 m in 2009. Doro's
shares are quoted on the Nasdaq OMX Stockholm, Nordic list, Small companies.
Read more about Doro at www.doro.com.