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Interim report 1 January - 30 September 2008, Doro proves 25 per cent growth and EBIT of SEK 4.7 million (SEK 0.9 m) for Q3

Interim report 1 January - 30 September 2008, Doro proves 25 per cent growth andEBIT of SEK 4.7 million (SEK 0.9 m) for Q3 • Sales for Q3 amounted to SEK 101.9 million (SEK 81.2 m), 25.3 per cent growth.Sales for the first nine month amounted to 241.4 million (SEK 232.5 m) afternine months.• The profit after tax for Q3 was SEK 4.1 million (SEK 0.8 m) and 0.5 million(SEK 2.0 m) after nine months. The operating profit (EBIT) for Q3 was SEK 4.7million (SEK 0.9 m), SEK 2.2 million (SEK 3.1 m) after nine months.• Earnings per share after tax for Q3 was SEK 0.24 (SEK 0.05) and SEK 0.03 (SEK0.11) after nine months.• The order intake was SEK 101.3 million for Q3 and SEK 256.7 million for thefirst nine months.• The cash flow from operations was positive in Q3 and stood at SEK 6.9 million(SEK 1.6 m). For the first nine months the cash flow was SEK -20.3 million (SEK-28.6 m), due to seasonality and the build up of working capital for new productlines.• The Care Electronics business unit continued to drive sales growth and boostedits share of total sales to 37.4 per cent (10.6 per cent) for the first ninemonths.• Outlook for fourth quarter uncertain due to financial crisis and the rapidstrengthening of the US dollar. The negative currency effect will be partlyoffset by a hedge contract.Comments by the CEO, Jérôme Arnaud “The sales growth of about 25 per cent in the third quarter was mainly driven bythe continued strong growth in Care Electronics. This resulted in an EBIT forour third quarter of SEK 4.7 million, which is a substantial improvement,compared to last year (SEK 0.9 m). We actually tripled sales in Care Electronics over the third quarter compared tolast year, and at year to date sales have risen from about SEK 24.8 million toSEK 90.3 million, comprising about 37 per cent of our total sales. Easy-to-usemobile phones account for the majority of sales within Care Electronics. Oureasy mobile phones are now listed with main operators like TeliaSonera, Telenor,T- Mobile and other leading operators and retailers. Doro is today one of the top five brands in the Nordic GSM market with asteadily increasing market share. I expect that Care Electronics will account for the majority of our sales during2009. We are underpinning our business in Home Electronics by introducing newinnovative DECT phones to the market. For example, we are launching a new DECTrange in the fourth quarter with ECO functionality that has been awarded EnergyStar certification, granting a choice of less impact on the environment.”Sales Doro had sales of SEK 101.9 million (SEK 81.2 m) in the third quarter and SEK241.4 million (SEK 232.5 m) over the first nine months. Sales improved by 25.3 per cent during the third quarter compared to the sameperiod last year. Care Electronics sales represented 42.8 per cent of totalsales for the third quarter and 37.4 per cent of total sales for the first ninemonths. Operating profit - EBITThe operating profit before tax and financial items for the third quarter wasSEK 4.7 million (SEK 0.9 m) and for the first nine months SEK 2.2 million (SEK3.1 m). The development of the gross margin was positive in the third quarter comparedto the second quarter. The positive impact was due to a greater sales mix ofCare Electronics' products with higher margins. However, the US dollar exchangerate had a negative impact on the gross margin.Cash flow, investments and financial positionThe cash flow from operations in the third quarter was SEK 6.9 million (SEK 1.6m) and for the first nine months SEK -20.3 million (SEK -28.6 m). Investmentsduring the third quarter amounted to SEK 4.0 million (SEK 0.4 m) and SEK 6.8million (SEK 1.7 m) for the first nine months. At the close of the period Dorohad bank loans of SEK 28.1 million, and the company had SEK 60.0 million intotal pre-agreed credit facilities as of 30 September 2008. The equity/assetsratio was 23.0 per cent (25.1 per cent) at the end of the period.The financial items include an income from a US dollar hedge contract (SEK 0.8m)Business unitsDoro has three business units: Home Electronics, which is mainly home telephony,representing 50.8 per cent of sales in Q3, (75.2 per cent 2007), BusinessElectronics, mainly specialising in business telephony, 6.4 per cent of sales(12.9 per cent in Q3, 2007) and Care Electronics, which specialises in telecomsand electronic products for senior citizens, 42.8 per cent of sales (11.9 percent in Q3, 2007). Home ElectronicsFor the first nine months sales fell 18.7 per cent to SEK 129.1 million (SEK158.8 m), while the decline was 15.1 per cent for the third quarter, followingsales of the DECT ranges NeoBio and Arc. Business ElectronicsBusiness Electronics sales fell by 32.7 per cent to SEK 22.0 million (SEK 32.7m) over the first nine months, as the introduction of the VoIP program has beenslower than anticipated. At the beginning of October Doro launched a new DECTIP phone, the ip880dect.Care ElectronicsCare Electronics boosted its sales over the first nine months to SEK 90.3million (SEK 24.8 m), a rise of 264 per cent. Sales are growing for the entireCare Electronics range of products; however, it is the success of easy-to-usemobile phones that mainly drives growth. During the quarter, Doro also introduced an amplified cordless phone calledHearPlus 318w that also includes enhanced ergonomic features for the elderly.RegionsDoro's three regions are Mainland Europe (42 per cent of sales for the firstnine months), Nordic (42 per cent) and UK and Ireland (16 per cent). Mainland EuropeSales fell by 7 per cent over the first nine months of 2008, due to pricereductions within the Home Electronics, while Germany and Benelux showed growthdue to new distribution agreements.Nordic region Sales rose by 22 per cent for the first nine months. Sales for the region werepositively affected by the continued strong growth of mobile phones in CareElectronics but also the sales increase in Home Electronics. UK and Ireland, Sales rose by 66 per cent for the first nine months driven by easy-to-use mobilephones and Home Electronics products, particularly through Dixon's Store Groupin the UK. PersonnelThe headcount was 58 at the end of the period. 28 are based in Sweden, 17 inFrance, 5 in the UK, 4 in Norway and 4 in Hong Kong.Kjell Reidar Mydske, previous Sales Director has been appointed Sales andMarketing Director for Doro. The appointment follows the resignation of the current Marketing DirectorFredrik Forssell.Ulrik Nilsson, head of operations at Doro, has been appointed a member of groupmanagement.Doro's sharesDoro is listed on the OMX Nordic Exchange Stockholm Small Cap - Telekom/IT.Parent companyThe parent company's net sales for the first nine months amounted to SEK 108.0million (SEK 17.4 m). Doro Nordic AB, the former sales company, merged with theparent company Doro AB on 1 January 2008. The loss before tax was SEK 15.2million (SEK -23.9 m).OutlookSales for the fourth quarter are expected to be in line with last year as theCare Electronics sales shows continuing strength and the Home Electronics showssigns of stabilising its sales trend. Some uncertainty remains to what extentthe financial crisis may influence distributors' purchases and retail demand.The rapid strengthening of the US dollar is expected to impact result negativelyfor the fourth quarter. The negative currency effect will be partly offset by ahedge contract. The result for the fourth quarter is expected to be below sameperiod previous year. RisksRisks and instability factors are mainly related to supplier disruption,customer relations and currency exchange rate fluctuations. Apart from theserisks and instability factors, which are described in the Annual Report 2007 onpages 24, 41 and 42, no other risks of any significance have been identifiedduring the last period.Accounting principlesFor the Group, this interim report is prepared according to IAS 34, InterimFinancial Reporting, and the Annual Accounts Act and for the parent company,according to the Annual Accounts Act.Future reports and eventsQuarterly reportsThe Board has decided the following dates for quarterly reports:January-December 2008: 13 February 2009 (changed from previous interim report)January- March 2009: 6 May 2009AGM: 26 March 2009 The quarterly reports are available atDoro's website: www.doro.comThis quarterly report has been drawn up in accordance with the same accountingprinciples as the last annual report, and has been subjected to a review by thecompany's auditors.Information disclosed in this press release is provided herein pursuant to theSwedish Securities Markets Act and/or the Swedish Financial Instruments TradingAct.Lund, 23 October 2008 - 1.30 pmThe Board Doro AB (publ) Co. Reg. No 556161-9429Doro is listed on the OMX Nordic Exchange Stockholm Small Cap - Telekom/ITInformation For further information, please contact:CEO Jérôme Arnaud, +46 46 280 50 05 CFO, Annette Borén +46 46 280 50 62Magistratsvägen 10SE-226 43 Lund, SverigeTelefon: +46 46 280 50 60www.doro.comThe Board and CEO confirm that this interim report provides a fair overview ofthe company´s and Group´s business, position and results and describes thesignificant risks and uncertainties faced by the company and the Groupcompanies.Bo Kastensson Chairman of the BoardJérôme Arnaud CEOPeter BlomBoard memberTomas Persson Board memberJonas MårtenssonBoard member

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